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The talk is all about benefit fraud both in media and press about how ‘scroungers’ are taking the ‘hardworking’ taxpayers money . Well the truth is after listening carefully to DWP Committee chaired by Dame Anne Begg seems most of it the 0.7% is Error. Now some of that error is claimant error through not reporting changes, but most of it seems to be departmental error. In this another very long Blog I will discussing that and the way they plan to tackle the issue by various means but still insisting on lumping fraud and error in same basket with no intention of separating the two, as it clearly isn’t beneficial when it comes to media demonization of  claimants  and their awful clumsy drunken approach to welfare reform rhetoric and the lies being spun. THIS IS REALLY IMPORTANT TO UNDERSTAND THE BACKGROUND BEHIND IT!

In March 31st the DWP Select Committee heard evidence from;

Jan Smith, External Affairs Director, Call Credit Information Group,

Simon Dukes, Chief Executive, fraud prevention service CIFAS

Sean Duffield, Partner and Public Sector Director,Nuance Communications

This was indeed a interesting take on the ways they were looking at tackling Fraud & Error within the benefit system overall. Simon Dukes kicked it off with saying he felt it was fair to separate Fraud and Error in his view as 80% was within HMRC & DWP  and in his opinion “It is important to identify these two together and to split them apart to identify how much is fraud and how much is error. Only by doing that and measuring it can we actually measure success against it”, Jan Smith agreed with Mr Dukes. Debbie Abrahams MP suggested  that benchmarking might be way to measure risk like Visa do in banking, however Mr Dukes felt it should be based on Risk Management and was cautious re benchmarking as it was suggesting pitting one against the other which brings in competitive element into the mix.

Jan Smith stated “By taking that risk-based approach, you have more flexibility with your resource, because the low-risk cases can be dealt with by one area and the high-risk cases by investigators, etc”. The risk of low case management and high risk cases are clearly defined and the letter would under risk analysis be flagged up. Debbie Abrahams MP queried whether or not there was a acceptable level of loss due to fraud and error, Mr Duffield said that there was a sort of” inevitability  about it” and said had it even identified fraud within the system and without full access  he would reserve judgement on questioning the figures in front of the committee but any fraud was unacceptable. The Chair Anne Begg suggested that it was possible that large amounts of unreported  fraud could be hidden in the system  that isn’t yet flagged up and that error normally shows up eventually, Mr Dukes agreed that was indeed a possibility, so this fraud  thus far seems to be one of just possibility rather than fact?

Mr Dukes said fraud data sharing between organisations  helped prevent it at the gate rather than wait till horse had bolted approach in the private sector and felt that could be applied to the public sector too, using a zero tolerance approach, and was key to tackling the issue. Risk Management is key to tackling that a mistake by a claimant failing to report is fraud at low level while others have made a deliberate attempt to claim benefits for example from 3 different boroughs is high end fraud. Mr Dukes suggested checking the lifecycle of a claim could highlight risk management being successful in clamping down. 42% of overpayments it was suggested by Dame Angela Watkinson was down to incorrect reporting of income or earnings  Mr Dukes concurred with her assessment on this,  she asked that correct information reporting is only way of verifying correct claims Jan Smith agreed with her. “The fields that they complete and the information they provide in that claim need to be standardised. Everybody needs to be filling in the exact same form, providing the exact same information, no free format.You have to have values in because, if you have the accurate data, it is far easier to follow up when someone’s circumstances change.In the private sector, there is technology available that allows monitoring to take place so that, when there is a change in someone’s circumstances, you can be proactive about it. If you do not have the correct information in the first place, it is difficult.”

The subject of repeat offenders was brought up which Mr Dukes felt was 40% of re-filing and that was fraud was being in-putted into the system which he felt could be tackled using technology that is widely used in private sector ,by banks, insurance sector  which the banks have worked on over last few years called’ single customer review’, this enables the bank to look across its divisions and highlight any potential problems. Anne Begg queried the complexity of the Social Security system and sheer volumes of people’s changing circumstances.  That constant is not just one thing that is changing; it is two or three different elements that might be changing in that. Jan Smith agreed .

I totally agree with you on that but, if you know you have that customer and you know the different benefits they are entitled to and what is happening with them, if there is any change in circumstance, you are in a far stronger position to cut any areas and stop any fraud that may take place.

The Chair Anne Begg asked when moving to Universal Credit would the system be on household basis or individual basis like it was under Housing benefit at present, it was confirmed it will be individual by Jan Smith, and Simon Dukes concurred that while data was complex it was merely just a case of ‘pipework or plumbing’ within the system.

Then Nigel Mills MP brought up technology ,by ways the system could tackle multiple claims (Organised Fraud) to the individual who has had cash payments they didn’t declare. Mr Duffield said he had the voiceprint  technology to tackle that.

Sean Duffield   I have a technology of voiceprint identification so, if somebody was contacting on one channel and then being somebody else on another channel, I could potentially, with other pieces of data, identify that you have that duplicate fraud happening there. It is hard to crack that small casual fraud, if you could categorise it as that, versus a fraud that is more organised and systemic.

Jan Smith then went on to explain a fraud hub that has been used in Housing Benefit Sector in London and other areas so far . CIFAS  highlighted that fraudsters move from region to region  not nationally,  which has brought about successes in housing benefit crime.  This highlighted hot spots of criminality , which they were able to tackle. Mr Dukes agreed.

Kwasi Kwarteng MP then brought up prosecutions in relation to fraud and the monetary values of pursuing an investigation and what could they learn from the private sector .

Jan Smith When we started working with local authorities to pull this fraud hub together and produce a fraud product, a lot of the benefits they were looking for from it was making it a swifter process to identify fraud in order to manage their resources moreeffectively. The way that we deliver information can be used by anyone, so you could have someone frontline who identifies, because of all the data that is washing around, that this is a potential fraud case. We identify them as red, amber or green so, if you get a red case, that probably means it needs to have full investigation; you need to do yourSection 29s. That is going to be resource-intense. Some of the lesser frauds can be dealtwith by other people, so it helps local authorities manage their budgets more effectively. In the public sector, if you identify what you think is fraud, you can, under Section 29 exemption, come to a credit reference agency and access a lot more data than you would be able to normally to investigate that fraud. They are used by public sector investigators, but you have to be fairly confident that there is a serious fraud taking place. You cannot just do a blanket case for everyone.

 

They went on to discuss that prosecution rate at present is around 28% but they didn’t have that data as it was other organisations that held that information . Kwarteng  queried if they felt it was acceptable rate and Mr Dukes felt it was rather low overall, while acknowledging it could be lowered , although it is very resource intensive to decide to follow through a fraud case, it was also would they be able to get the money reclaimed. he suggested they focussed on prevention not cure.

Kwasi Kwarteng: The idea is that you would reduce the numbers at the beginning,  if  you like,  and then,  if you keep the numbers of prosecutions,  that would be a higher proportion? Simon Dukes: Exactly.

So here we have a play on figures and statistics  and we wonder where they seem dream stuff up from, this is obviously how. You are probably bored to death by now, however it is important to understand this important information ! Only by understanding the methodology behind it can we address  the serious issues we face and how they operate. They call it tackling a problem, I call it  setting up a system so complicated that a simple error  or mistake, can be costly to you the claimant being labelled a fraudster.

Graham Evans MP then brought up ‘digital by default’ mantra. Using  Indentity Assurance  (IDA) .

A question for you, if I may, Sean: IDA, the identity assurance for universal credit, is apparently some way off. I understand that it is “overly complex and potentially unwieldy”. Can you expand on that view?

http://www.computerweekly.com/news/2240208131/Identity-assurance-system-moves-into-beta-test-phase.

 

The hub will manage communications between users, identity providers and government service providers. It will allow users to select and register with an identity provider, and then use their assured identity to access digital services,” wrote Steve Wreyford, the head of communications and marketing for the IDA programme. Eight companies were selected last year to provide IDA services – The Post Office, Cassidian, Digidentity, Experian, Ingeus, Mydex, Paypal and Verizon.

 

Sean Duffield stated “how that is going to work on the telephony channel.” You mentioned at the top of your question digital by default, and I would just caution on that. Today, we know that 11% of the population have got very low skills when it comes to using the web, so we need to make sure that, if people want to identify and verify with the DWP, they can do that across channels, both web and the telephony channel. We need to make sure that we have processes for security across all those channels that are also the same across those channels, so you do not need to know one set of passwords for the web channel, for instance, and another set for, let’s say, the telephony channel.

 

 

Graham Evans went on to ask “Howard Shiplee, the DWP senior responsible officer for universal credit, told us in February that “no one is using a totally online approach”. Do you agree that an entirely digital approach to this thing is feasible, achievable or indeed desirable when dealing with financial transactions?”

Sean Duffield responded that “I do not think it is a good idea, no. Nobody in the commercial world has really achieved that and people who have set out to just have a web service, quite commonly, have then ended up with call centres”.

My question is if that’s the case why are we trying to push a square peg in a round hole at the huge cost to taxpayer when it probably isn’t going to happen to make it a success , and  the more I read the transcript the more worried for taxpayer I became talk about elephant in the room scenario. also that 11% demographic was 50-55 and over age group weighted against the elderly and lower socioeconomic backgrounds which I may add will be the most disadvantaged group in society, yet again bearing the brunt of this complex system which they say is simplifying it.  They are planning to make income reporting  a central point of this benefit claiming system and that is coming into play as I am writing at end of the month for Jsa and Lone parents amongst other groups in my universal credit for homeowners blog. The next point they address is the worrying part  of welfare reforms being similar to the Australian Model and of  the use  of voice verification technology for those who are nervous on phone , suffer mental health or have a speech impediment or deafness. how in god’s name are those people’s needs going to be addressed, using voice technology. This is big brother stuff you saw as a kid in Dr Who, which is being implemented here in reality. This is called Centrelink in Australia and a automated income/ earning information line where claimants can report changes of circumstances, initially they gave out passwords but found that many forgot their password as many of us do.

Mr Duffield reported that you go into that and just using your voiceprint, based on previous calls, you just need to know your account number in fact and then, through your voiceprint, the rest of the identification process is done. It has saved a lot of time and increased reporting.It is very hard to impersonate. Like all technologies, it is not 100% but, when you combine it with knowledge-based information, i.e. your account number and the voiceprint, it is a very secure way of transacting.To date via that system the Australians state they have had no fraud via that system. He didn’t not have figures to back that up. Barclays Wealth has deployed a biometric solution.Sean Duffield You phone into Barclays Wealth. The first time you phone in, it will put you through the standard identification and verification process, asking you the third and fifth letters of your password, as you would with your bank normally. Once they have then captured your voiceprint, you are offered an enrolment, “Would you like to enrol in the process?” Most people say yes; 93%, I believe it is, say yes. Subsequently, when you phone back into the bank, you just give your account number and then, through talking to the agent for around 15 seconds of audio, that is sufficient for them to let you in to use your banking services.Just as under universal credit where people are going to have to report their income, that line was set up so that people could report their income. Obviously it cuts both ways. You do not want people falsely reporting income to people or being malicious as well, and it prevents that.

Sean Duffield stated the use case for this technology is it stops imposter fraud. Sheila Gilmore MP stated ” I am quite surprised that this has not been mentioned to us before as a possibility, because it has been one of the real problems in getting a working IT system. We were told that one of the reasons for the slowing up and so on was that this was one issue that had not been properly resolved”. Sean replied this is not new technology the technology has been around a while now. There are a number of deployments out there. As more organisations take it on, more organisations will go with it. There has been that slight element that it is new, so people have been a little wary of deployment. However, I want to emphasise that this voiceprint technology is part of this overall solution. If I do not have correct data in the first place to enrol people, I may enrol fraudsters. I need to have data based on credit histories and all of these things, so I know that I am not enrolling fraudsters in the first place. It is not the be-all and end-all; it is part of an overall solution. There are two ways you can do it: you can do it with an agent-assisted way using the say-anything technology, or you can use text-dependent technology where people have a set passphrase. If you did three-factor authentication of people that is very, very hard to sidestep

 

 

This will surely discriminate against the groups mentioned previously from my perspective if this is UC ‘sway forward. Simon Dukes stated you have to have ID assurance alongside fraud prevention as well. You have build fraud prevention into your system. The topic of identity fraud, is helped by online social networking  being a insecure way people data gather or even via conversations on train where people give details out in earshot of potential  identity fraudsters.60% online false identities are on social networks and 80% of fraud is committed online via online shopping sites such as Amazon, Ebay etc.

Jan Smith stated that via LHA’s they are identifying 10% potential fraudulent cases a week  yet some LHA are reluctant using legal and data protection citing  not to join up to data sharing, yet the Serious Crime Act of 2007 says that “public sector data can be shared with the private sector where it is to be used for prevention or investigation of fraud, but there is no clear guidance that says, “Here’s what you can share; here’s what you cannot share.” In the private sector Oral evidence: Fraud and error in the benefits system, HC 1082 15 there is; there are rules on reciprocity and there are rules on data sharing. That has been a stumbling block for us”.

Dame Angela Watkinson: Would you say that there are opportunities for the private and the public sector to work collaboratively or co-operatively together in combating fraud, to the benefit of both sectors? Mr Dukes stated I find it extraordinary that we do not!

Nigel Mills: Ms Smith, in your written submission, you quoted the Information Commissioner who said something like “responsible data sharing in a good cause is always Oral evidence: Fraud and error in the benefits system, HC 1082 17possible”. Is what you are saying that it might be possible for the Department perhaps to be a little less conservative in its approach and try to push the boundaries? She replied Exactly. Nigel Mills MP asked “In theory, it could be a condition of claiming a benefit that you let us have access to all your data, anywhere we choose to go and find it. That might be going a little bit far.”

Jan Smith: It could be a step too far.

Too blooming right it is a step too far  would they like to come and live with us too? This is way past  the point of ‘Fairness’  and a invasion of our human rights for a poxy  £71 quid a week JSA for instance. ever feel like you stepped into a matrix?

 

 

Nigel Mills: Do you think there are any further powers the Government needsto take, perhaps changing legislation or something? We saw some changes in the Prevention of Social Housing Fraud Act 2013, which allowed local authorities to ask for a range of information. Do you actually think more powers are needed or is it better use of powers that already exist?

Jan Smith: I think better use of powers that already exist and the removal of this confusion of what can and cannot be done, so you have a consistent approach, whether it is central Government or local government.

Simon Dukes: The Serious Crime Act 2007 quite clearly set up this SAFO type of organisation—a specified anti-fraud organisation—for the purpose of being able to facilitate public and private data sharing. It has not happened. Clarification of SAFO andwhat is written in the Serious Crime Act would go a long way to helping perhaps remove the logjam, and then there is a bigger cultural thing in some Departments about data sharing with the private sector. That is a different issue, but some clarification on theSerious Crime Act would go a long way.

When talking about data matching and errors that were made by HMRC which resulted in benefits being stopped  raised by Sheila Gilmore MP,  Mr Dukes commented We are talking about the differences between the challenges facing DWP and the challenges facing the private sector. You are absolutely right that DWP is going to have to pay claimants regardless of whether they have committed fraud in the past, if they are entitled to those payments. Jan Smith: All the data matching we will do will raise exceptions. It is those exceptions that need investigating. The majority of data that is held by credit reference agencies is accurate . Simon Dukes: By the fact that we are going to an online system whereby, with assurance of identity, you will be able to— Sheila Gilmore: The assurance of identity is the crucial bit.

However Lord Freud has thus far rejected joining CFIAS according to Mr Dukes who has stated that they will do that work for nothing, which the committee like the sound off  ‘something for nothing culture’ clearly runs through government dept’s. So Basically this risk management is for purpose of flagging up potential fraud.

If you have managed to stick with this exceptionally long blog ‘Well Done ‘ I will attempt to do Part Two tomorrow, health permitting where I will show how they apply methodology and talk more about fraud stats. 

http://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/news/committee-hears-evidence-from-dwp-and-treasury-ministers/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Comments on: "Benefit Fraud Does It Really Stand up to Scrutiny? Part1" (1)

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