Thousands of people on low incomes are being sent letters by an American outsourcing company accusing them of cheating on their tax credits and warning them that they may have their benefits stopped.
Concentrix, part of a multi-billion pound US business services company, has been accused of going on a vast “fishing expedition” as part of a controversial contract with HM Revenue and Customs to outsource its fraud and error detection.
Staff working at Concentrix have told The Independent that they are under pressure to open between 40 and 50 new tax-credit investigations every day and often don’t have time to check whether the allegations they are making stack up.
Meanwhile, worried claimants have been taking to internet message forums to ask for advice for dealing with the false allegations being made against them.
Many said they believed the letters to be hoaxes as they asked for personal financial information such as bank and mortgage statements to be sent to the company within 30 days. Those who ignore the letters risk having their tax credits halted. In the last quarter, the Citizens Advice Bureau said it helped 20 per cent more people with tax credit problems than in the same period in 2013.
However, it said it did not know the cause of the rise. One concerned charity worker contacted The Independent after seeing a client who was confused and frightened by the letter. The worker was worried that many people will ignore or not understand such letters and consequently have their tax credit cut.
“A lot of people might have got these letters and ignored them because they think they look like a scam,” said the charity worker, who asked to remain anonymous. “It means in the next month or so people will have their tax credits stopped and that’s when the problems will really start.”
The letter accused the recipient of living with a partner and said if that wasn’t the case she had to provide proof. “That seems outrageous,” the charity worker added. “They’re picking on vulnerable single people and making wild accusations. The onus should be on HMRC to provide proof, not claimants to be forced to prove otherwise.”
Carmen, a single mother who lives with her three children in Grimsby, recently received a letter from Concentrix telling her it had evidence that she was living with a woman “partner” who was registered at that address.
The letter told Carmen, who is heterosexual, to send documents in her name to prove that she was living alone.
“I live in social housing and lots of tenants have lived here before me,” she said. “No one has ever questioned my entitlement to child tax credit.”
Staff at Concentrix’s office in Belfast, where the contract is based, have told The Independent that they haven’t been given enough training to differentiate between genuine claims for tax credits and fraudulent ones.
They also say they are being encouraged to hit a target of making 20 decisions a day, or about three an hour, on whether to stop, amend or leave a tax claim unchanged.
Staff say they often don’t have enough time to review all the relevant data before making a decision. They also allege they have not been given enough training to make effective decisions.
One worker on Concentrix’s tax-credit contract, who asked not to be named, said that in his own estimate about six in 10 investigations into people suspected of not declaring that they’re living with a partner are opened in error.
Workers will check people’s tax-credit claims by comparing information from claimants on childcare costs, working hours and pay against other sources of information including credit-reference agency databases and from government – for example, PAYE and benefit payments. Different teams investigate tax credits, answer calls from claimants and make a decision on whether to stop the credit.
“It’s quite analytical work and needs attention to detail,” the worker said. “Just one mistake in a calculation of someone’s salary or childcare costs can mean you stop someone’s payment.”
In a statement, Concentrix said it couldn’t comment on clients due to confidentiality but added: “Over the last several years we’ve demonstrated significant commitment and growth in the UK and Northern Ireland. We’ve increased our staff by more than 1,000.”
A spokesman for HMRC said: “Concentrix carries out routine tax credit checks on behalf of HMRC to ensure that people receive the money they’re entitled to. Last year alone checks just like these led to corrections to awards of more than £700m. The company is not paid on the number of letters issued, but on the basis of savings to public finances arising from correcting tax credits claims that are incorrect. We know how important tax credit money is and are trying to ensure that people are paid the correct amount of money. We only contact people where we have an indication that information may be incorrect. We are working closely with Concentrix to ensure it carries out these checks accurately.”
But Mark Serwotka, general secretary of the Public and Commercial Services union, said that it was “another example of the Government and HMRC chasing those on low incomes, when they should be chasing tax-dodging millionaires. Concentrix work on a ‘payment by results’ basis, so they only get paid if they cut the tax-credit bill. This means they profit out of stopping payments made to people in real need. This service should be publicly accountable, not led by profit.”