Thousands in London Face Incorrect Benefit Cuts From Automated Fraud Detector

Thousands of people could soon be receiving letters threatening to cut off vital housing benefits as they face being incorrectly targeted by a new automated fraud detector. From a report: The government-backed London Counter Fraud Hub, developed by BAE, has been hailed a success after being trialled in four boroughs - Camden, Ealing, Croydon and Islington. Using vast quantities of data from millions of households, it is designed to target potential fraud cases involving the single person council tax discount, subletting in local authority housing and business rate relief and rating.

Ealing, the lead council for the project, found the automated elements of the system targeting single person discount fraud was 80% effective -- which is seen as an acceptable benchmark. With just over one million claimants of council tax single person discount in London, the London Counter Fraud Hub estimates it will detect around 40,000 fraudulent cases in the first year. Critics say the 20% error rate is unacceptable as around 8,000 people will receive letters wrongly accusing them of fraud.