Description

Public Authorities (Fraud, Error and Recovery) Act – What The New DWP Codes Mean For Debt And Welfare

Welcome to Debt Matters, the show where we unpack the stories behind debt, collections and credit control in the UK.

In this episode we break down an important new consultation from the Department for Work and Pensions under the Public Authorities (Fraud, Error and Recovery) Act 2025. The DWP is asking for views on three draft Codes of Practice that will shape how it checks benefit claims, gathers information and recovers debt from overpayments.

We walk you through:

• What the new Act actually does and why the government says it needs stronger tools to tackle fraud and error in the welfare system.
• How the proposed Eligibility Verification Measure would let DWP ask banks and other financial institutions to run data checks on accounts receiving benefits – and what data can and cannot be shared back.
• The new Debt Recovery Code, including powers like direct deductions from bank accounts and other enforcement tools, and the promises around proportionality, governance and oversight.
• The Information Gathering Code and how DWP wants to request information to support fraud investigations while staying within data protection rules.

We also look at the safeguards being proposed – limits on the data that can be shared, requirements for a human to make final decisions, independent oversight and penalties for misuse and we talk honestly about the concerns raised by privacy and civil liberties groups about “bank spying” and financial surveillance.

Most importantly, we ask what all this means for people in debt and for anyone working in collections or credit control: how state-led fraud prevention links to fairness, how overpayments become problem debts, and what best practice might look like for both public sector and commercial creditors.

The consultation is open until 27 February 2026, so now is the time for advisers, creditors, local authorities and consumer groups to have their say. In this episode we give you the key points so you can understand what’s on the table and decide how it could affect the people you work with.

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