UK faces another Post Office Horizon scandal unless plans to snoop on benefit claimants are stopped

Imagine you’re a single mother supplementing your income with universal credit so that you can afford to feed and clothe your toddler. You receive a letter from the Department of Work and Pensions (DWP) stating that your claim is under review and you are not told why.

Between feeding time and nursery drop-offs, you must now confirm your contact details, take calls from DWP and upload additional documents providing evidence of your entitlement – or risk DWP suspending your benefits. 

What you don’t realise is that, unbeknownst to you, your bank has scoured through your bank statements using an algorithm to check whether you’re receiving the right amount of welfare. When the algorithm flagged your account, your bank reported you to the DWP. That is the reality of the ‘bank spying’ powers introduced by the government’s Public Authorities (Fraud, Error and Recovery) Bill (PAFER), which is a hair’s breadth away from becoming law.

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At a time when the government stands accused of balancing its last budget on the backs of disabled people, leaving carers out to dry after the repayment scandal, and taking the winter fuel allowance from older people, these powers are as galling as they are disproportionate. They would force banks to become an arm of the state as unwilling investigators and reverse the presumption of innocence by treating every benefit claimant as a suspect-by-default.

Big Brother Watch has been campaigning tirelessly against the powers since they were announced at the start of this year. The House of Lords is due to return PAFER to the Commons for a final sign-off – this time, with three important safeguards.

First, a bank account being flagged must not automatically mean the individual is suspected of fraud. Second, before taking action to amend a benefit or investigate a claimant a senior office must review the flag – it cannot be done by computer alone. Finally, the independent reviewer who will scrutinise the use of these powers must consider the effects on vulnerable people, including whether they have been excluded from banking services.

MPs must do the right thing and accept the safeguards that the House of Lords have sensibly added to PAFER.

The changes introduced by the upper chamber will help to reduce the risk of wrongful flags and investigations of innocent people. It’s not hyperbole to suggest that we risk replicating a Horizon-style scandal with these powers. When an algorithm is scanning the bank accounts of millions of people, even an error rate of just 1% could lead to 100,000 wrongful flags. That’s why the law must explicitly state that a benefits claimant who is identified by these new bank spying powers is not automatically a suspect.

This is especially critical because the algorithm will be unable to distinguish between whether someone has been overpaid due to fraud or error. We cannot risk carers who have gone abroad to look after their dying father or disabled people who accumulate  direct payments savings to manage their care being wrongfully identified by a computer and falsely accused of benefit fraud.

This is also why it is so important that any account flagged by the bank’s algorithm is reviewed by a human. Although DWP has promised that there will always be a ‘human-in-the-loop’ to check the computer’s outputs, there was nothing in the bill that guaranteed that safeguard. Ensuring that benefit claimants are not subjected to automated decisions will protect against ‘Robo-debt’ style scandals from happening in the future.

Despite warnings from a range of civil society groups, the bank spying powers look set to become law. It will therefore be imperative that we are able to monitor their effects. Given these powers will target some of the most marginalised members of our society, it is right that scrutiny of them must take into account their effect on vulnerable people.

Of course, these safeguards are not a fix-all. It cannot be proportionate to subject millions of people who are not suspected of any wrongdoing to intrusive financial surveillance just to help DWP administer itself – nor can it be right that benefits claimants enjoy less privacy than the rest of us just because they claim money from the government. The least MPs can do is accept the important safeguards made in the House of Lords – the legislation, and more importantly their constituents, will be all the better for it.

Jasleen Chaggar is the legal and policy officer at Big Brother Watch.

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