Crackdown on pounds 3m university grant fraud

The university admissions service is to crack down on fraudsters who make millions of pounds in grants and student loans each year at the taxpayers' expense.

Last year 700 false applications were detected by the University and Colleges Admission Service (UCAS) - pounds 3m worth of grants and loans - and senior officials admitted yesterday that this could be the tip of a much bigger iceberg.

Now a new computer system is to scan all application forms to check for recurring references, names and addresses.

So far this year 250 cases have been detected but Tony Higgins, chief executive of UCAS, said worrying trends were developing. He said it was impossible to judge how many fraudsters were currently escaping without being caught.

"It is terribly difficult to know how big the iceberg is," Mr Higgins said.

While in the past the criminals tended to adopt false identities there have been cases recently of them hacking into Department of Social Security computers and applying on behalf of existing benefits claimants.

By having each claimant's post redirected to their address they made it difficult for admissions officers to detect similarities on the forms.

In Liverpool a thief filed 20 applications on behalf of people who were unaware of what was going on. Although a large proportion of fraud used to come from the West African community it appeared to be spreading in Britain, Mr Higgins said.

Academic fraud was rarer, although some Greek students had apparently tried to get into university using false qualifications. The financial fraudsters never appear at university, but they use false exam certificates, references and other documentation, he said.

Some gangs are apparently placing members in office jobs in order to steal forms and official stamps, Mr Higgins said.

In one case three applications arrived with references which were barely literate. One bore the stamp of a bank, one of a major supermarket and one of a water board. When UCAS officials contacted the organisations involved they said they had never heard of the applicant.

For the past few years UCAS has checked forms manually in order to root out false applications. When these are found UCAS tells the applicants that they have been rejected because they appeared to be fraudulent. In such cases, the police are also informed.

A computer system called Hunter, installed six weeks ago, will from September scan all 400,000 forms which come in each year for inconsistencies. A database of fraudulent names and addresses has been built up over the past two to three years.

The London Team Against Fraud, set up by local authorities and the police to combat such frauds, estimates that billions are lost each year through grant and social security crime.