Life-changing Scams and Child Benefit

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Hello. In today's Moneybox podcast, we hear from a senior MP who says parents who lost their child benefit because the tax office incorrectly believed they'd moved abroad deserved better treatment. With just days to go to the budget, how more people are paying more income tax, workers and pensioners, and what might change on Wednesday.

Plus, savers get extra protection on their cash. But first, victims of fraud are being failed by the criminal justice system. That's according to the charity Victim Support.

Here at Moneybox, we often hear about the devastating impact of fraud and scams, which are the most common crime in the UK. And as one victim told us, it can change you forever. I don't think you ever get over it, really. I think it stays with you and it makes you suspicious. You wonder, anybody that you don't know, are they who they say they are? It's really dreadful.

More from Joan and those concerns from victim support in just a moment. But first, our reporter Dan Whitworth has been looking at this as part of the BBC Scam Safe Week. Dan, the scale of fraud is absolutely huge, isn't it? It is, you know, Fliss. And we know the vast majority of fraud is never even reported by victims because of feelings such as embarrassment, guilt, shame, victim blaming. But in the year to June, there were still 1.2 million recorded cases.

across just England and Wales. That's according to the National Fraud Intelligence Bureau. Now, during the same time period, there were fewer than 13,000 prosecutions. That's according to Ministry of Justice figures. So that's the equivalent to around one... percent of that total number of recorded cases that's a lot of people losing a lot of money and getting no justice

So I've been to Stockton-on-Tees in the northeast of England to spend some time with a charity working to help victims on the very front line of the fight against fraud. Hello, Dave. My name's Dave Mead and I'm the manager of the Victim Care and Advice Service. Our job is to make sure that people are affected by crime. are supported emotionally, practically and through advocacy and obviously a big, big chunk of our work and some of the most challenging work is that around fraud.

The figures are eye-watering. Every month we're contacting 500 and 800 victims of fraud. The vast majority of victims... Don't report. We find some, but we've got to get into the communities through elderly groups, faith groups, youth groups. We've got to raise the conversation. We're going to go and meet some of those people now, right? Absolutely.

And Dan, I've just introduced you to Vicky. She's one of our financial fraud advocates. Okay, you ready, Vicky? Yeah, let's go. Who are we going to see first?

so we come to see joan today she's lost a thousand pound due to an impersonation scam a lot of money it is a lot of money especially to her So how did you get targeted by these criminals? Well, it was simply on my mobile phone. Things were getting a bit tight money-wise. I'd retired and I had very little... income in decent pension but i mean you know these days pension doesn't take you very far

With money tight, Jo needed what little she did have to work harder for her. So when she saw what was advertised as an investment opportunity online, seemingly backed by two well-known celebrities, she entered her details to find out more.

Shortly after, she was contacted by a woman offering to help. She wanted £1,000 and I said, oh, that's a bit, you know, too much. And she said, well, there's ways you can do it. You've got money in the bank, haven't you? I mean, you've got a bank account, so you've got... An overdraft. I kept being a bit tempted, so that's what I did. Over the course of many weeks, Joan was bombarded with phone calls. The criminals, the scammers, they wouldn't let her go without trying to steal more money.

It was absolutely ghastly, really. But the more I hesitated, the more angry she got. The bigger her anger became, the more suspicious I became. And in the end, I cut her off altogether. And that was when I rang the police and asked... for help. Well, it was very upsetting, obviously. All I kept thinking about was how I'm going to eke out the money that I've still got. Then I kept thinking...

I'm not going to get this back, I know I'm not. And then I had to think of how I was going to manage. After being put in touch with the Victim Care and Advice Service, Joan was able to get her money refunded. How has being a victim of this fraud changed you? It's made me very, very suspicious. You can't sleep properly. You just cannot sleep properly. And it's on your mind all the time.

All I was doing was avoiding ever speaking to anybody again. See you later. Thank you again. See you later. Bye. Bye-bye. What's your reaction when you see people like Joan go through... and having been through what she's been through to be honest even though i help people and speak to people day and day out it's still hard to see them relive that emotion but it must be rewarding for you knowing the help you give these victims and seeing them come out the other side

It's so rewarding. It's such a good job to do to be able to support people like that and get great results for them. Just need to try to support as many as you can, eh? Absolutely, yeah. I would do this all day, every day. So Vicky, Dave and their colleagues going above and beyond every day to try to help people like Joan. And Dan, what's the government had to say about this?

Well, the Home Office has said that fraud is a serious and damaging crime that can affect anyone at any time and that it's determined to bring those responsible to justice. It also told me in the new year it will publish its long-awaited fraud strategy, which it says will reduce fraud, target offenders and protect...

Dan, thanks very much. Well, I'm joined now by Wayne Stephens, the National Fraud Lead at Victim Support, which works across England and Wales. Wayne, you feel people are being failed by the criminal justice system. Why? Well, bearing in mind that it's the most common crime that people are likely to experience, there's very little criminal justice resources going in to track down and prosecute offenders, as your clip.

Victims tell us that they feel let down by the police when they report, by the banks, when they try and stop payments. by social media companies when they complain about advertising or they report fake profiles, and they're let down by the lack of justice. But there is a lot more financial protection, isn't there, for fraud victims now? Many more get reimbursed, for example, by their banks.

Listening to Joan, though, talking about sleepless nights, being suspicious of people, this kind of crime can still have a huge impact. It's a very personal... crime fraud is it exploits our vulnerabilities it exploits us when we're not expecting to be conned out of money, and it can undermine our confidence and our sense of ourselves and where we are in the world. It can turn people's lives upside down, apart from the financial losses.

And we heard in Dan's report 1.2 million recorded cases of fraud. And the real figure could be much higher. We think it's much higher than that. The Office for National Statistics last year said that they thought about... 15% of fraud is reported to the police or to action fraud. And we know from the work that we do with thousands of victims every year that people are very reluctant to report. They often think it's...

pointless, nothing will happen. The police response is often quite poor, particularly if there's an international dimension to the crime or the offenders may live outside of the immediate policing area. So what more do you think needs to be done then?

Well, firstly, we think that there should be effective public campaigns to raise awareness of the very real risks that we all face, because fraud can affect any of us, and to increase confidence in reporting. We think there should be more between law enforcement the banks the financial services more broadly to design out fraud

keep the bad actors out of the system, identify fraud as it's happening in real time and prevent it. And we think that fraud victims needs need to be prioritised by increasing the funding available for independent support services. Now, I know in the past you've said...

that social media is where some of this fraud starts. I want to put to you, Tech UK says tech companies are working hard to prevent their networks and services being abused by criminals. UK Finance says banks have invested billions in tackling fraud. work being done, isn't there? So what do you think we've got wrong then about preventing fraud in the UK? There is work being done and we want to see more of it. We still hear from victims who come to our services who say they've tried to...

They've tried to get their hijacked social media accounts back, and social media companies are very slow to respond to that. They still see adverts that they know are fraudulent because they've lost money to them. They still see those circulating online. In terms of reimbursement, we're waiting to see the statistics from the new reimbursement scheme, which only came in last year. So we haven't seen...

actual data on the extent to which people are being reimbursed. And of course, who isn't being reimbursed? Wayne Stevens from Victim Support. Thank you very much indeed. The customer journey isn't just changing, the journey is change. New ideas spread in an instant, expectations rise overnight, decisions are made in the blink of an eye. That's why companies need Sitecore.

We put your brand in the moment, right when your customer is ready to act. So every message feels personal, timely, and makes your brand unforgettable. The journey is change. Sitecore moves with it. See how at sitecore.com slash journey. Hear that? That's me with a lemonade in a rocker on my front porch. How did I get here? I invested to make my dream home home. Get where you're going with MDY, the original mid-cap ETF from State Street Investment Management. Getting there starts here.

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Now, parents who lost their child benefit because HMRC wrongly believed they had moved abroad. deserved better treatment, according to a senior MP, who also says the tax office still hasn't fully answered her questions. Dame Meg Hillier, the chair of the Treasury Select Committee, has told me the mistakes made...

show the distance between HMRC and the real world. It's after payments were incorrectly stripped from thousands of families because travel data was used to conclude they had left the UK permanently. As Moneybox previously reported, many of them were simply on holiday. It's now emerged that a pilot of the scheme had extra checks, but...

bafflingly, those were scrapped when it was rolled out more widely. Nasia had her child benefits suspended after going to a wedding abroad last year. She lost the payment for two children, even though one of them wasn't even born at the time she travelled. I do understand they want to tackle the people that cheat in the system, but I just don't think the way they're doing it is right, especially with my second son. I've not even left the country, so I don't understand why they did it that way.

and the way they send your application is such like long long questions to fill up it's just like you're applying for the first time again and i found that a bit annoying you know Well, HMRC has now apologised to people like Nasir who were affected. Dame Meg Hillier is a Labour MP and the chair of that committee, a group of MPs appointed to scrutinise how the Treasury works. She sent a long list of questions about this. to HMRC. So I asked if she got all the answers she wanted.

Yes, well, we wanted to know what they were doing to do this. And of course, as a committee, we don't have a problem with them innovating to try and find fraud and error in a system. And if someone is fraudulently claiming job benefit, well, that's quite wrong, obviously. But in this case, they had a pilot. where they were comparing flight data with employment data and seeing if that would help catch people who were not.

who were getting child benefit fraudulently. Then when they carried on doing that outside the pilot, they removed the employment data check, which increased the errors, and that led to just over 3,600 people.

losing their child benefit and having to have it reinstated. But let's be clear about the human impact of this. In my constituency, where one and two children are living in poverty and other families really rely on this money coming in, that's money they didn't get and they didn't expect not to get. It was just cut off. And they need to really consider the human impact of what they're doing, even when they're trying to catch people who are fraudulent.

But that's the really confusing thing with this whole pilot, isn't it? It used the flight data. It did an initial initial check of PAYE data. And then when it was rolled out, they missed out that vital second part to do what they called streamline the process. HMRC has said in its letter that it was made clear by the Home Office that their data could not be used in isolation to interpret a person's residency status and eligibility to child benefit.

And that is exactly what happened. Which is puzzling to us, exactly as you say. They said they'd streamline the process. But when you're streamlining a process, and in that case, they found that that led to more errors. The errors in the pilot were 11% of people, so one in 10 people.

shouldn't have had their benefits stopped and it was 15% after the pilot because they removed that check and that seems to us extremely odd and questions that we'll be asking them when they appear in front of the committee in January. A lot of people of course are concerned about tax evasion. They are concerned about benefit fraud. We know that benefit fraud specifically cost HMRC £270 million a year. So it is right, isn't it, that they're trialling these new ways to combat it? Absolutely.

any issue with HMRC being innovating to try and find new ways to catch people who are fraudulent. So we agree with the ambition, but they need to understand the human impact of what they're doing and make sure they've got safeguards in place. Is this error for your faith in HMRC? Well, I think this is the distance between...

HMRC or Whitehall and the real world is really apparent here, that people really rely on their child benefits. So absolutely right. If someone's fraudulently claiming, of course, no one wants to see that and people need to be caught.

People aren't. And in this case, we've found over one in 10 so far. And we don't know yet what the final figure will be. You have to have it reinstated. Lost their money overnight. And we still don't know what that final figure is. The figure of 3,600 and a bit more than that is.

from the end to the end of October. And here we are, you know, partway through November. So it might even be higher. HMRC says it took swift action and that where there was evidence that customers had continued UK employment, it reinstated payments automatically without them. needing to make contact. Those payments have been backdated. Is that enough?

Well, it's all very well. And of course, from a big bureaucracy like HMRC, they will be backdated, so that's fine. But some families would have found it a real struggle in the month or the fortnight that that payment didn't arrive. They would expect it to arrive. It suddenly didn't, you know, even though it was reinstated.

It's good to have it back, but it's too late for some families when they actually needed to pay a bill or pay for their grocery bill. And people who've legitimately claimed it should deserve better treatment, really. HMRC says it's now writing to people who it believes have emigrated first. It's going to give them a month to respond before it suspends their child benefit, their cross-referencing international travel data and PAYE data to decide who those people are.

But I suppose one question is, some people might not appear in that PAYE data for many reasons. They could be self-employed. They could be not working because of caring responsibilities, for example. Is what's being used now accurate enough? Well I think you raise a really valid point that you know

two data sets on their own have caused problems and one of those was removed for the pilots. They do need to do much more detailed further checks. Now of course HMRC should have information about self-employed people but only if they've been self-employed for a

a number of years and there are other data checks that can happen and legitimately do across government comparing notes with the for instance the department for work and pensions database and others so we'll be wanting to get detailed answers to some of the questions not fully answered in our letter

and we will keep on top of this as a committee. Dame Meg Hillier, Chair of the Treasury Select Committee, speaking to me earlier. For the last few weeks, we've been answering your questions on what might be in the budget, from ISIS to salary sacrifice.

On Wednesday, we finally hear how Rachel Reeves will raise the billions of pounds needed to balance the books. Nothing is certain, but for a long time, it seemed like she might raise income tax. Now, that is apparently no longer on the cards. What could still be on the cards is a two-year extension of the freeze on income tax thresholds, which currently runs... to April 2028. Lots of you have been getting in touch to ask what that might mean.

Usually, the point at which people start to pay income tax or move into higher bands goes up with inflation. But those thresholds have been frozen since April 2021, meaning more people start to pay tax or move on to the higher rates. Our reporter Joe Kreisner has been out and about and witnessed talking about this. Well, I'm particularly worried because I'm a pensioner and I'm going to be ending up paying taxes once I've reached that threshold.

I reckon the threshold should go up with inflation. It's not going to go up until 2028. So after next year, in 2027, I will be ending up paying tax. I've worked 54 years. Never thought we'd be paying taxes on our state pension. Personally myself, I think I'm allowed to earn £12,800 or £12,400 before I'm taxed. But if you've got a pension off the government and you've got a personal pension...

I pay £100 a month. Yeah, it hasn't changed since 2021. No, it should do, yeah. Let's hope she's listening. Well, maybe she is. Definitely listening to that is Joanne Walker from the Low Incomes Tax Reform Group, which was set up to provide free tax education and support. Joanne. We talk a lot about thresholds on Moneybox. Now, you're a chartered accountant and a tax advisor. Can you just give us the simple explanation of how this works?

Yeah, in the UK, our income tax system consists of bands and thresholds, and it's a slice system. So what that means is that only income falling within a particular band attracts tax at that point. bands rate. So a simple example, if you've got someone who's got income of £13,000, the first £12,570 of that, which is the personal allowance, That doesn't have any tax due on it. It's only the £430 above that that is taxed at the basic rate of 20%. So that would be an £86 tax bill.

Thank you. OK, well, let's stick with pensioners because pensions income is taxable and we are seeing more pensioners paying tax, aren't we? Even some whose only income is the state pension. Just explain why. Well, the state pension since 21-22, while the personal allowance has stayed the same, state pension has been subject to something called the triple lock, which has meant that it's pretty much always increased.

by a reasonable amount every year. And so while that has been increasing by inflation or at least inflation every year, the personal allowance has stayed the same. That means more and more people who only receive the state pension are actually falling into the basic rate tax band simply because of the amount of their state pension.

OK, and as you say, it goes up every year. The Institute for Fiscal Studies thinks that by 2028, everybody will pay tax on their state pension. Well, I think what it'll be is I think it's all full... Anyone who in receipt of the full new state pension. will have state pension in excess of the current personal allowance. So yes, anyone in that position. People with lesser amounts of pension might not quite be in into tax, but also if they've got any other types of income.

then they will be paying tax as well. Now, this isn't just about pensioners, is it? So the IFS also says a worker whose earnings only just keep up with inflation is paying a larger fraction of those earnings in tax because of this freeze. Yeah, that's right. So someone who's maybe seen cost of living increases in their earnings income over the past few years. Because of this freeze in the personal allowance and the thresholds, what it means is they're paying more tax despite...

despite not really having a greater proportion of income compared to cost of living rises. And so actually that makes them feel worse off. So they've got, in numbers, a higher salary. It is worth saying though, isn't it, that this freeze does raise a significant chunk of cash for the Treasury. It is. I think the IFS have shown that this freeze is the equivalent to increasing the rates of income tax across all bands by about 3.5%. It's extending the tax base.

So it's taking more people into tax and yes, it's raising a huge amount. This idea then that the Chancellor could announce a two-year extension to the existing freeze, explain what that would mean for taxpayers. Well, that would... bring even more people into tax. I think national minimum wage workers, the chances of...

Well, anyone on full-time national minimum wage would certainly be paying tax, but even people who are only working, say, 20 hours a week at national minimum wage would be brought into tax. And I think about... It would possibly bring about one in five people into higher rate tax. OK, so quite a significant change. Joanne Walker, thank you very much indeed. Well, we did ask the Treasury about this and it told us, of course, that it does not comment on speculation around changes to tax.

outside of fiscal events. But there's not long to wait now. And don't forget that you can hear what the budget means for you in Moneybox Live at three o'clock on Wednesday, just a couple of hours after Rachel Reeves reveals all. As always, we want your comments, your input, your questions, your reactions on the day. You can email moneybox at bbc.co.uk or you can send us a voice note or a comment on WhatsApp. The number is 033 06783.

183. Now, if the budget is causing you some anxiety, let's have some reassuring news next. Savers with cash in UK banks, building societies or credit unions will soon have even more protection if one of them goes bust. The Financial Services Compensation Scheme will soon protect deposits of up to £120,000. Dan is back. Dan, just tell us what protection there is right now.

OK, so at the moment, the way it works is that customers can claim back up to £85,000 worth of their money if their bank fails. That's going to rise to £120,000 as from December, and that level hasn't gone up since 2017, so quite a...

Big change for us. And there's also a change, isn't there, to the temporary protection you get for high balances. Yes, so that will go up from the current £1 million to £1.4 million, and that's for six months. That's to cover big life events such as proceeds from...

a house or an insurance payout, which obviously can leave a lot of money sitting in your account. Now, do people need to do anything for this? No, savers don't need to take any action. The new limits, they'll apply automatically. Also worth saying this is funded by a levy on the... banking sector.

Dan, thank you very much. One quick email from Hugh on fraud, who says, if the big social media companies required people to exhibit ID when opening an account, the amount of fraud would be significantly reduced. Thank you for that. And thanks to you for listening to today's. Moneybox podcast. Remember to contact us about the budget or any story you want us to look at, simply email moneybox at bbc.co.uk or get in touch on WhatsApp. You can send us a voice note or a comment to 033 06. 783 183.

In today's podcast, the reporters were Dan Whitworth and Joe Krasner, the researcher Ima Devlin, the studio manager Paul Lewis. No, not that one. Our editor is Jess Quayle. I'm Felicity Hanna. And this was a BBC News money and work production for BBC Sounds. After Anthony Easton's father passes away, he goes through his dad's old suitcase. It's filled with cryptic clues, neatly stacked German money, a family tree he doesn't recognise, and also finds...

his father's birth certificate, but bearing a different name. From BBC Radio 4 and the History Podcast, I'm Charlie Northcote, and I've been working with Anthony Easton to understand his family's dark history. and how they lost a fortune worth billions today. What happened to his family, their business empire, and all the money? Listen to The House at Number 48 on BBC Sounds.

The customer journey isn't just changing. The journey is change. New ideas spread in an instant. Expectations rise overnight. Decisions are made in the blink of an eye. That's why companies need Sitecore. We put your brand in the moment, right when your customer is ready to act. So every message feels personal, timely, and makes your brand unforgettable. The journey is change. Sitecore moves with it.

See how at sitecore.com slash journey. Hear that? That's me with a lemonade in a rocker on my front porch. How did I get here? I invested to make my dream home home. Get where you're going with MDY, the original mid-cap ETF from State Street Investment Management. Getting there starts here.

Before investing, consider the fund's investment objectives, risks, charges, and expenses. Visit statestreet.com slash IM for perspectives containing this and other information. Read it carefully. MDY is subject to risk similar to those of stocks. All ETFs are subject to risk, including possible loss of principal. Alps Distributors, Inc. Distributor.