Feeds

£15m+ lost in tax credit fraud

Government payroll records used to steal IDs

Boost IT visibility and business value

HM Revenue & Customs estimates crooks have made off with at least £15m after defrauding the tax credit system by making false claims in the name of job centre workers. The estimate came when HM Revenue & Customs executive director David Varney appeared before the House of Commons Public Accounts Committee on Thursday to answers questions from MPs over an attack on the revenue which is far worse than first suspected.

HM Revenue & Customs shut down its tax credit portal website at the start of December after uncovering an attempt to defraud the system using the identities of Department of Work and Pensions (DWP) staff. Varney said the fraud against the tax credit systems was enabled by illicit access to government payroll records. This illegal access was likely facilitated by corrupt insiders.

Initially it was thought that up to 1,500 job centre workers might have had personal information stolen. Now it is feared that up to 13,000 job centre staff might have been exposed to attack. Fraudsters are reckoned to have secured the National Insurance numbers, names and dates of birth of thousands of job centre staff working in London, Glasgow, Lancashire and Pembrokeshire.

The information obtained was enough to make fraudulent tax credit claims redirected to false addresses and accounts controlled by crooks. False claims of up to £1,000 a year appear to have been siphoned into fraudsters' bank accounts. Crooks took advantage of a lack of comprehensive checks of online applications to make an easy killing. Varney told MPS that losses identified so far come to £15m, a figure that's likely to rise since the revenue is only at an early stage of investigating the scope of the fraud. A criminal investigation has begun into the case.

It's not the first IT-related crisis to hit the tax credit system, which was established in its present form two years ago as a means to pay supplements to families on low incomes. EDS was fired by the revenue after the system it put in place degenerated into chaos, with families being over-paid credits, only to be hit with big claw-back demands from the government department. The National Audit Office claimed in October that mistakes by claimants - along with fraud - had resulted in over payments of £460m. ®

Gartner critical capabilities for enterprise endpoint backup

More from The Register

next story
Microsoft: We plan to CLEAN UP this here Windows Store town
Paid-for apps that provide free downloads? Really
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
Who needs hackers? 'Password1' opens a third of all biz doors
GPU-powered pen test yields more bad news about defences and passwords
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
Hear ye, young cyber warriors of the realm: GCHQ wants you
Get involved, get a job and then never discuss work ever again
Chinese hackers spied on investigators of Flight MH370 - report
Classified data on flight's disappearance pinched
Microsoft cries UNINSTALL in the wake of Blue Screens of Death™
Cache crash causes contained choloric calamity
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?