The country's biggest credit reference agency, Experian, signed a deal with the Government to act as their benefit fraud 'bounty hunters' sniffing out benefit cheats by following their incriminating paper-trails.
By examining household bills, employment records and credit card applications, Experian will be able to discover if claimants for single parent or sole occupant discounts and benefits are fraudulent.
Although the value of the contract is undisclosed, it is believed that Experian will receive bonuses for exceeding its targets. And since the HMRC expects to save around £700 million and the Department for Work and Pensions around £100 million, they can afford to offer a generous contract to Experian.
Despite penalties of hefty fines and prison sentences for fraud, benefit cheats continue to make fraudulent claims at a cost of around £5.6 billion a year.
David Gauke, the Exchequer Secretary to the Treasury, said: "The Government will not tolerate people who dishonestly divert money away from those who are genuinely entitled to it.
"Working with Experian will allow HMRC to escalate the fight against tax credit fraudsters, helping to ensure that they are caught and punished."
Under the pilot programme, several cases have already been resolved. One woman from Essex had been claiming for benefits as she was a single mother, but it was found that she had a partner living with her, who had claimed her address as his own to the passport office, the DVLA and his employer.
One being caught, the woman cancelled her claim and submitted a joint claim. This saved losses of £43, 634.
Lord Freud, the minister for welfare reform, said: "Benefit fraud is a crime and we are committed to stamping it out. We will catch and punish those who abuse the system and prevent fraud from entering in the first place."
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