The UK banking industry has raised alarms over government's plan to allow the Department for Work and Pensions (DWP) to reclaim benefits debt directly from banks without a court order. UK Finance expressed concerns that such measures might threaten consumer protection for vulnerable account holders. The new legislation is part of a broader effort to combat benefit fraud, particularly for those no longer on benefits or self-employed, but bank representatives fear it undermines their own protections for customers and could complicate relationships with the government amid economic growth initiatives.
UK Finance, representing British banks, warned that the government’s plan allows DWP to reclaim funds directly from accounts, posing risks to consumer protection laws.
Ministers argue that direct access to claimant's bank accounts will speed up debt recovery, benefiting the DWP's wider initiative against fraud.
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