What the DWP Hasn’t Told the Public

Bank Statements, Surveillance Powers and the New Fraud Law 

When the UK Government quietly confirmed Royal Assent for a sweeping new piece of legislation on 2 December, few outside Westminster seemed aware of its implications. Yet the Fraud, Error and Recovery Act 2025 (often abbreviated as the FER Act but described by critics as the “FEAR Act”) may represent one of the most far-reaching expansions of investigatory power in two decades. It affects every resident in the United Kingdom — not only benefit claimants, but employees, the self-employed, freelancers, online sellers, gig workers and even those who have never engaged with the welfare system.

The legislation grants unprecedented authority to a broad range of public bodies, allowing them to access personal financial information, compel disclosure from banks, track trading patterns and share data at a scale previously unseen. Government agencies including the Department for Work and Pensions (DWP), HM Revenue & Customs (HMRC), local authorities, the NHS, police forces, and even schools operating as trusts may now request or exchange personal data with minimal friction.

What is more striking still is that many of these powers may be exercised without informing the individual concerned, without requiring a court order, and without needing the person’s consent.

The result is a legal, administrative and cultural shift — one that raises profound questions about privacy, digital surveillance, state overreach, and the risk of technological error affecting millions of ordinary people.
This article examines the scope of the new law, why banks and jobcentres have been increasingly demanding bank statements, and what the government’s expanding ability to monitor financial behaviour means for the public.

A New Legal Era: The Fraud, Error and Recovery Act 2025

The Fraud, Error and Recovery Act 2025 represents the most extensive anti-fraud legislation since the early 2000s. Its stated aim is to reduce benefit fraud, tax evasion, welfare error and unlawful overpayments, while simplifying lines of communication between state bodies. But its detractors warn that the law effectively normalises real-time financial surveillance for millions of people who have never been suspected of wrongdoing.

At its core, the Act allows public authorities to:

• Request personal financial information (including bank statements, credit card activity, trading records and digital account logs)
• Share data across agencies without repeated authorisation
• Access bank-held information silently, meaning banks may be legally barred from informing customers
• Apply for warrants to search homes, vehicles, workplaces and locked premises
• Trigger automated fraud-detection processes when information appears inconsistent
• Compel compliance from banks, digital platforms and other institutions

The implications are broad and deep. A person’s digital history, online marketplace sales, casual reselling, cryptocurrency activity, free-school-meal applications, car finance arrangements, credit card use, or simple family transfers may now be scrutinised under suspicion of undeclared income or financial misrepresentation.

While the government argues these tools are essential in tackling modern fraud — a rapidly evolving challenge in a digital economy — civil rights advocates warn that the Act erodes fundamental principles of privacy and presumption of innocence.

Why Jobcentres Have Been Asking for Bank Statements

For months leading up to the passage of the law, many people reported that jobcentres, work coaches and DWP offices were increasingly insistent about obtaining bank statements. Countless claimants expressed confusion: Why were demands becoming more aggressive? Why did staff insist that refusal was no longer an option?

The answer now appears clear.
The DWP had been preparing for the new legal framework and, in practice, had already shifted to a surveillance-first model that assumes financial information is fair game.

Under the new Act, you can no longer refuse to provide bank statements if requested. Non-compliance triggers an escalation mechanism allowing authorities to obtain the information directly from your bank — without notifying you and without needing a court’s approval.

This represents a significant change from long-standing norms, raising serious concerns about consent, transparency and oversight.

Silent Access: The Most Controversial Power in the Act

Perhaps the most worrying aspect is the concept of silent access. Under the new legal regime, once an agency suspects that your financial behaviour does not match your declared circumstances, it can issue a notice to your bank or another financial service provider ordering the release of your information.

Importantly:

• You will not be informed.
• Your bank cannot legally tell you.
• No court order is required.

This has alarmed not only benefit claimants but also people with side hustles, small businesses, part-time self-employment, eBay or Vinted sellers, and those who occasionally resell items online. Even gifts from family members may be flagged if the amounts appear irregular or unexplained.

Given that the vast majority of transactions today occur digitally, a bank statement becomes a near-comprehensive portrait of a person’s life: their spending habits, movements, health indicators, relationships, childcare routines, and more.

It is this level of insight that critics argue exceeds what is necessary for fraud prevention and instead resembles a system of pervasive state surveillance.

Banks’ New Role: The EVM Process

A central component of the legislation is the introduction of the Eligibility Verification Mechanism (EVM).

The EVM is an automated process triggered when official data about a person does not match the information they have provided to a public agency. Once activated, the mechanism alerts banks, financial institutions and credit providers to conduct further analysis.

This may lead to:

• Automatic checks on income patterns
• Reviews of regular transfers
• Scrutiny of trading behaviour
• Cross-referencing with HMRC and DWP databases
• Red-flagging of unexplained payments
• Investigation of suspected unreported earnings
• Referral to fraud teams at DWP or HMRC

Because the process is automated, concerns have arisen about false positives — particularly given the DWP’s recent history of administrative errors.

The DWP’s Known Error Problems

The DWP has long faced criticism for inaccurate decision-making, wrongful sanctions and incorrect overpayment calculations. High-profile cases have seen individuals told they owe thousands of pounds in repayments due to mistakes made by the government itself.

Automation and AI-powered systems have amplified these risks. Over the past two years, numerous claimants have discovered sudden debts generated by algorithmic assessments that failed to account for legitimate circumstances.

Against this backdrop, the idea of a system that:

• monitors every transaction
• flags discrepancies automatically
• shares information across agencies
• and can freeze accounts or demand repayments

is, for many, deeply unsettling.

What Can Trigger an EVM Investigation?

According to guidance linked to the implementation of the Act, several categories of financial behaviour are likely to initiate an EVM check.

1. Unexpected Income

Large or sporadic deposits — such as £500, £5,000, or more — will be questioned, especially for claimants declaring low income or no income.

2. Regular Transfers

Recurring payments from PayPal, bank transfers from relatives, or marketplace sales may be treated as undeclared business activity.

3. Trading Patterns

If your transactions resemble commercial operations — even casual selling on sites like eBay, Vinted or Facebook Marketplace — the system may presume you are self-employed and undeclaring income.

4. Cryptocurrency Activity

Crypto accounts are not exempt. The FCA-regulated exchanges operating in the UK are required to disclose transaction histories on request.

5. Repeated or Large Gifts

Even legitimate family support may be flagged if it appears inconsistent with a person’s declared circumstances.

6. Transactions Suggesting Work Activity

Payments from customers, invoices, or platforms can be interpreted as evidence of undisclosed employment.

Given the scale of digital commerce today, these triggers may affect millions of people who have never viewed themselves as “business owners” in the traditional sense but engage in occasional selling or gig-economy work.

Warrants and Searches: Expanded Physical Powers

Beyond digital surveillance, the Act also gives authorities the power to apply for warrants allowing them to search:

• homes
• workplaces
• garages
• vehicles
• sheds
• locked rooms
• storage units

This vastly broadens the investigative reach of agencies like the DWP, which historically relied primarily on paperwork reviews or interviews.

Authorities may now enter premises to obtain documents, inspect property, gather digital devices, or collect evidence relating to benefit claims, tax assessments or financial conduct.

The Crucial Detail: Three Months of Bank Statements

One of the more technical but significant elements of the Act relates to direct deduction orders — a tool allowing the DWP to recover alleged overpayments directly from a person’s bank account.

The law now requires that:

“Before a direct deduction order is obtained, the Minister must obtain and consider bank statements for the account covering a period of at least three months.”

This minimum period has major implications.
If a person has been asked to provide statements covering years rather than months, questions arise about whether those requests were justified, proportionate or compliant with the new statutory framework.

Conversely, for those who have refused, believing they were within their rights, this legal requirement means refusal is no longer an option.

The Areas Under Most Scrutiny

The Act identifies several categories likely to be prioritised for enforcement. These include:

1. Carer’s Allowance

Recent national controversy over Carer’s Allowance overpayments — with thousands of carers accused of breaches often caused by administrative oversight — has led the government to push for stricter monitoring.

2. Universal Credit Earnings Mismatch

The integration of HMRC’s Real Time Information (RTI) system means the DWP now cross-checks earnings automatically. Any discrepancy between declared income and bank activity may lead to an investigation.

3. PIP Lifestyle Contradictions

Personal Independence Payment has long been a target of DWP scrutiny, especially when claimants have conditions not immediately visible. The new law intensifies this.

Examples include situations where:

• a claimant says they rarely leave the house, but their account shows regular spending on fuel
• a person reports severe mobility restrictions yet is detected by Automated Number Plate Recognition (ANPR) systems travelling frequently
• a claimant describes a limited social life but pays for restaurants, trips or holidays

While these lifestyle indicators may not represent fraud, the new system will consider them red flags requiring further examination.

Surveillance Beyond Banking: Cameras, Roads and Digital Footprints

The Act does not limit itself to bank data.
Modern digital life leaves a trail across:

• motorway cameras
• city-centre CCTV
• car park ANPR systems
• public transport travel logs
• mobile phone metadata
• online marketplace accounts
• delivery addresses
• subscription services

These data points may now be used collectively by the state to build a picture of a person’s movements, habits, finances and lifestyle.

For many, the discomfort comes not from being monitored for wrongdoing, but from the sense that the government may now monitor everyone by default.

Error vs Fraud: A Crucial Distinction

One of the central problems identified by advocacy groups is the risk of conflating human error with intentional fraud.

A person may:

• misreport earnings
• misunderstand a rule
• fail to update their circumstances
• overlook a notification
• receive financial help from a relative
• engage in minor online selling without considering themselves “self-employed”

None of these behaviours necessarily constitute fraud.
Yet under the new system, even accidental or trivial inconsistencies may activate automated penalties or debt recovery.

The government insists that genuine mistakes will be treated fairly — but the DWP’s past performance leaves many unconvinced.

The Broader Implication: A Cultural Shift in the Welfare State

The new legislation signals a move away from a welfare system based on trust, human judgment and communication, toward one that assumes suspicion by default.

Where previous systems relied heavily on interviews, compliance conversations and manual checks, the new model relies on:

• digital surveillance
• algorithmic pattern recognition
• automated cross-checking
• centralised data sharing
• large-scale flagging of anomalies

This may streamline the detection of organised fraud.
But it equally risks ensnaring the innocent.

The human cost could be substantial:
freezing of accounts, loss of access to funds, sudden debt notices, demands for repayment, or prolonged investigations.

For those already vulnerable, such consequences could be devastating.

Advice for the Public: How to Navigate the New Landscape

While the legislation is now active, individuals can take practical steps to minimise risk, protect themselves from false allegations, and maintain compliance.

1. Keep Thorough Records

If you receive gifts, loans or family support, keep written confirmation of where the money came from and why.

2. Declare Side Income

Even casual selling on online platforms may now be considered business activity. If in doubt, declare it.

3. Maintain Accurate Information with the DWP

Update any changes immediately — earnings, household changes, living arrangements, health conditions.

4. Check Bank Statements Regularly

Ensure your financial activity matches what you have told relevant authorities.

5. Avoid Mixing Personal and Business Transactions

Use separate accounts if you engage in regular trading or freelance work.

6. Document Any Errors You Identify

If you believe an agency has made a mistake, gather evidence early.

A Future of More Oversight — Not Less

The Fraud, Error and Recovery Act 2025 marks a turning point. The state’s power to access personal financial data has grown dramatically, and its tools are built not merely on traditional investigation but on a web of digital surveillance and AI-supported analysis.

Supporters argue that this is essential in a world where fraudsters are increasingly sophisticated. Critics counter that the risk of ordinary people being caught in the system — whether through error, misunderstanding or algorithmic misjudgement — has never been higher.

In the coming months and years, the Act’s real-world consequences will become clearer. What is certain already is that privacy, autonomy and financial transparency will never again look the same.

And for millions of people navigating Universal Credit, Carer’s Allowance, PIP, small businesses, gig work or everyday financial life, understanding these new powers is not optional — it is essential.