Many people are being targeted by scammers offering government loans and grants linked to Universal Credit claims. There is no reason for anyone to apply for Universal Credit or a loan or grant on your behalf and if you become a victim, this money will need to be repaid. In this guide you’ll find out how you might be targeted, how to avoid a scam and discover what you can do if you need help applying for a government grant or loan.
What is a Universal Credit scam?
The main way a Universal Credit scam works is someone offering to apply for a Universal Credit Advance Payment on your behalf and taking some of the money as a fee.
They will often tempt you by suggesting this is free money from the government.
A Universal Credit Advance Payment can be up to a full month’s Universal Credit payment, with scammers taking a large chunk (40 per cent or more) for their services.
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There are a number of ways you might be approached by a Universal Credit scammer.
Some people have reported being approached in person by smartly dressed people claiming to be from Jobcentre Plus.
Others have been contacted online through social media groups, direct messages and adverts.
People have also been approached online by someone claiming to have a friend who works at a Jobcentre who will be able to process or approve the application on your behalf.
Some of these companies have professional looking social media profiles and websites, with testimonials and government logos.
Why shouldn’t you let someone apply for you?
There are is no need to pay someone to apply for an Advance Payment on your behalf and there are two other serious problems if you let them do this.
First, you have to repay the entire advance back to the Department for Work and Pensions (DWP), including the money the scammer charged you as a fee. This comes out of your future Universal Credit payments, which could leave you short of money.
On top of this, if you do need an Advance Payment, you’re losing some of the money you could be getting by paying someone to apply for you.
It can also create serious problems if you’re not yet claiming Universal Credit and you could end up even worse off than you intended.
How to avoid a Universal Credit scam
You can only get an Advance Payment if you are waiting for your first Universal Credit payment, so the way you will be targeted might be slightly different.
If you’ve applied for Universal Credit
If you’ve already applied for Universal Credit, but are still waiting for your first payment, scammers will apply for an Advance Payment on your behalf and take some of the money as a fee.
They will ask you for your Universal Credit login details, and claim to have some kind of inside access, like a friend working at the Jobcentre Plus, who can approve these payments quickly.
If you’re already getting benefits
If you’re already getting benefits, but not Universal Credit, scammers will first offer to make a claim for Universal Credit on your behalf or claim they can apply for a loan or grant, but in fact make a Universal Credit application for you.
The benefits Universal Credit is replacing are:
- Income Support
- Housing Benefit
- income-based Job Seeker’s Allowance
- income-related Employment and Support Allowance
- Working Tax Credit
- Child Tax Credit
If you allow someone to apply for Universal Credit for you, these benefits will stop and, depending on your circumstance, you could end up being worse off than you are now because of the way Universal Credit is worked out.
To do this, scammers will ask for personal information so they can make the claim online, such as your proof of identity, bank account details and National Insurance number.
If you’re not currently claiming any benefits
Some people can’t claim Universal Credit, for example students, people get the Severe Disability Premium of Employment and Support Allowance and people with more than £16,000 in savings.
However, these people are also being targeted by Universal Credit scammers.
Scammers are likely to make this sound as if it’s free money and will have to make a claim for Universal Credit on your behalf and you might not actually qualify for it.
If you do need to make a claim for Universal Credit you can ask your work coach if you need to make a claim for an Advance Payment while you are waiting for your first Universal Credit payment and they will tell you how to do this.
You will also be asked to come into your local jobcentre with proof of identity before the payment will be made.
Getting the right help to apply for Universal Credit or an Advance Payment
If you do need help applying for Universal Credit or an Advance Payment, you can contact the Citizens Advice Help to Claim Service on:
- In England 0800 144 8444
- In Wales 0800 024 1220
- In Scotland 0800 023 2581
The service is free and confidential and you can get help in your local area. It is available to everyone and is useful to use if you are not sure whether you should claim Universal Credit.
What to do if you’ve been targeted by a Universal Credit scam
If you have been targeted, even if you’ve not been a victim, you can report it to Action Fraud on 0300 123 2040, by using their online reporting tool, or to the FCA Scam Smart websiteopens in new window.
You should also report it to your Jobcentre Plus as soon as possible.
If you’ve been targeted or become a victim after you’ve been contacted online, you should use the reporting tool on Twitter, Facebook, Instagram or Snapchat. Your report might help stop someone else being scammed.
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