Identity thieves stole £2.7m from the online tax credits
system, the government admitted last week.
In a statement to parliament, paymaster general Dawn Primarolo
said the government estimated that the identities of 8,800
Department for Work and Pensions staff may have been stolen in
2003-2004, and that of these 6,800 had been used in an attempt to
defraud the tax credits system in autumn 2005.
"Of the 6,800 fraudulent claims, about 4,100 were fully
intercepted by HM Revenue and Customs before any payment was made.
Of the remaining 2,700 claims - where tax credit payments were made
into multiple bank accounts using the stolen identities - payments
were suspended immediately after they were discovered, and all
payments were suspended by 16 December 2005," she said.
"Swift action addressed the risk of higher losses, limiting the
loss from this fraud to an estimated £2.7m."
Earlier estimates suggested that 13,000 DWP staff identities had
been stolen, with fraud losses amounting to £15m.
Primarolo also said investigation into the theft of Network Rail
employees' identities resulted in at least 16,000 claims being
stopped. Last week Network Rail wrote to 30,000 staff to allay
fears about identity theft.
Last year the Pre-Budget Report stated that HMRC would double
the number of pre-payment checks carried out on new claims.
Primarolo said HMRC had offered the banking sector and other
financial institutions its help and expertise in detecting identity
fraud and ensuring that sufficient checks were in place to prevent
fraudsters from opening bank accounts using stolen identities.
Tax credits applications require the individual to provide their
name, address, date of birth, national insurance number, phone
number, benefits number or employment details, PAYE tax reference,
payroll number and employers' tax office. Self-employed claimants
must give their tax reference number.
Savings and strike threats at DWP, p16