Use Experian et al to improve service not just cut fraud

Today we see a headline story on long overdue plans to use the services of the credit reference agencies to reduce benefit fraud. What is still missing is a plan to routinely use their services to improve service. When you go into a major store and ask for credit it takes minutes for them to agree, having checked that you are unlikely to be a fraudster. The same should apply with regard to applications for benefit. Only if you if you are unknown or flagged as a risk should you have to pass through all the hoops and delays. Why has this not happened? Fear that a more efficient system would result in higher claims? Or fear that it would expose the true scale and nature of benefit  fraud?

Either way the time has come to ensure that benefits go to those who need them most.

At the same time we should migrate the nation’s databases to those who can be trusted to look after our personal data. Who do you trust less? HMC, DWP, DVLA, Google, Amazon, your ISP, the NHS, the Credit Reference Agencies, your Bank, your own Doctor?

Consumer research in the United States indicates that Americans trust the credit reference agencies more than local (State/County) government. And they trust the Federal Government nearly as little as they trust on-lines retailers, ISPs or technology companies. 

Who will dare fund a You-Gov polls to see who we trust?

P.S. I personally do not trust You-Gov sufficiently to answer some of their more detailed surveys on financial matters, let alone their request to put polling software on my system.





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Perhaps if the credit reference people and shops/banks were better at spotting their own fraud and ID misuse problems, and stopping the every growing spiral of so called 'id theft' I might have faith in them doing the job.

Nor is the idea without risk. We've had people continually harassed because they got onto the US no-fly list in error, they were "odd" (ie muslim), their records got confused with another or were erroneous. These sort of systems have too often been set up such that data is not corrected, is hard to get corrected, and exceptions are investigated repeatedly rather than recorded once for future reference. The fact it's currently to all intents impossible for the general public to sue people like Experian for defamation if they do make misleading reports only makes the problem worse.

The description of the payment scheme if complete suggests government ineptitude over contracts hasn't been fixed with a change of management. No business would sign to such a deal unless it also included a discount for the number of incorrect entries flagged up they had to waste hours processing.


Comment from Philip VIrgo: the evidence that I have seen appears to indicate that some (but not all) UK banks and insurance companies are rather good at picking up impersonation (alias ID theft) and protecting themselves and their paying customers - with the aid of the credit reference agencies and bodies like CIFAS and the Insurance Fraud Bureau. Do you have evidence that suggests otherwise? Or that different banks/agencies have markedly diffence approaches, success rates and/or customer care routines? The situation in the "pure-play" on-line world is, of course, rather different.

This is not a news story. It is recycling what already occurs to a degree, or in some cases, what has been considered and rejected on the grounds of legality or feasibility.

All government departments that work with HM Treasury already use credit reference agencies and are closely coupled to their operations.

There have to be significant underlying concerns when conducting business with credit reference agencies. In the case of this announcement, what controls are to be put in place that a query to a CRA by DWP will not prejudice future credit ratings due to the stored information of this query? This could lead to an underclass of people who are never able to get legal credit again because they once lost a job and signed-on.

A major issue with implementing such checks is that for long term unemployed, there may well be limited footprint to verify against. Is it right that a CRA decline on the basis of insufficient information warrants the necessity to enter a drawn-out benefit appeals process? Is it cost effective from the Department's point of view? A Credit Reference check serves a significantly different purpose to a benefit application. The use of a CRA is not going to improve any departmental processes that are fundamentally flawed. A CRA check should also not be mistaken for a valid benefit granting decision.

From a legal perspective, consideration has to be given to human rights and data protection issues. There is a fine line to be trodden between checking background details and trawling databases for possible crimes. This announced approach is very much at odds with this government's philosophy of rolling back the database state. No Contact Point, no ID cards, but data matching for those most likely to fail these tests.

Whilst I have outlined some very important considerations, it should not be thought that CRA have no place in government. They have some, but it must be strictly controlled and carefully implemented.

This is an attempt at headline grabbing. Neither this act, nor this sentiment should be a surprise to many.

If there is real value in this policy, is there virtue in extending the policy to other areas of government payment? Parliamentary expenses payments perhaps?

Comment from Philip VIrgo: HMG has indeed been using the credit reference agencies for decades but usually under law enforcement powers for reactive fraud investigation, not under commercial contract to improve service. Meanwhile the range of services available from the CRAs have evolved to meet the needs of financial services and retailers in an age of global travel, as well as of central and local governments around the world to cut costs and better target their services. Many of the latter are considerably more ore imaginative than UK central government. More-over, because the CRAs have to operate under multiple regulatory regimes

they commonly operate to the highest common denominator when it comes to infomratin governance - with rgimes for data separation and access control that are alien to most of the public sector, let alone those to touting on-line business models based on the resale of personal data and profiles of e-mail, transaction, browsing and social networking habits. This is an area that does indeed need a much more serious and realistic debate than a few headline grabbers. Hence the work of the Information Governance Working Group Society Alliance see for details

This is rather hypocritical these credit reporting agencies are a major scam depending on who is paying for there service will depend on how they manipulate the data they spew out.

Businesses can input information and change a consumers score almost real-time yet it takes plenty of labor and sometimes bucks just to have an injustice removed and it may still show up on another report or later down the road..

Credit scoring is a true money making scam. One ding on millions of Americans report and financial institutions charge you a higher rate making billions off this scam...

Comment from Philip Virgo: I happen to disagree quite strongly. The last data that I saw regarding who Americans and Canadians trusted (market research panels of 5000 in each case) indicated that the Credit Reference Agencies were trusted considerably more than Hospital Administrators or State Governments, while the Federal Government scored little better than On-Line Retailers or Internet Service Providers. Top were Doctors and Banks. Bottom were politicians and journalists. Bloggers were not in the list. No-one has yet dared to do a similar exercise in the UK.