What do the Government’s bank spying powers mean for me?

• Our campaign
• How do the bank spying powers work?
• How do the debt recovery powers work?

Our campaign

Big Brother Watch campaigned fiercely against the introduction of mass ‘bank spying’ powers under the government’s Public Authorities (Fraud, Error and Recovery) Act 2025.

We coordinated huge civil society opposition to the powers: dozens of disability rights organisations, older people’s advocacy groups, anti-poverty charities and human rights campaigners called for the powers to be removed, alongside more than 240,000 members of the public who signed our petition calling for the measure to be shelved. We gave evidence to the Bill committee and briefed parliamentarians across the political spectrum, who warned about the dangers of these intrusive powers and tabled amendments that we recommended.

We defeated the powers when they were snuck into a bill at the last minute by the previous Conservative government, but unfortunately Labour resurrected the plans. Thanks to our efforts, we succeeded in rolling back the most egregious privacy violations, but the powers are still an unprecedented expansion of suspicionless mass surveillance, deputising private banks as an arm of the state and treating benefits recipients as suspects-by-default.

The powers will force banks to trawl through your accounts and report back to the Department for Work and Pensions (DWP) if it appears you have received an overpayment of benefits – whether due to fraud or error – based on secret criteria. They risk exposing hundreds of thousands of innocent people to horizon-style injustices and it will be disabled people, carers, older people and those living in poverty who are likely to be disproportionately affected.

Despite our efforts and your support, we are incredibly disappointed that on 2 December 2025 these Orwellian powers became law. Below, we set out to explain how the Act might affect you.

How do the ‘bank spying’ powers work?

• The government will produce a list of ‘eligibility indicators’ that suggest an individual may have been overpaid benefits. This list will not be published, but the DWP offers two examples: if an individual has more than £16,000 in savings whilst claiming universal credit or appears to be abroad for more than four weeks despite receiving pension credit.
• The DWP will supply the list of ‘eligibility indicators’ to banks and issue a notice requiring the banks to return data which matches these criteria. The banks do not receive anything from conducting these checks – they are compelled to comply with a request from the DWP.
• The banks will algorithmically scan the bank accounts of its customers to identify benefits recipients and flag those who meet the ‘eligibility indicators’ – whether the discrepancy has arisen due to fraud or error.
• Only accounts in receipt of benefits, and other accounts held with the same bank, will be flagged. For example, if Tom received Universal Credit into his HSBC current account, that account as well as all other accounts he holds with HSBC (i.e., savings account) will be searched, but the accounts he holds with Lloyds and Barclays will be excluded.
• Where an individual is flagged as meeting the ‘eligibility indicators’, their information will be passed on to the DWP for further enquiries or investigations. The bank cannot pass on any financial information or special category data (i.e., data revealing your race, ethnicity, political or philosophical beliefs, etc). However they will pass on your name, date of birth and account information, among other details, as well as the reason why the account meets the ‘eligibility indicators’.
• From then on, the DWP will conduct their ‘usual processes’ to determine how to act on this intelligence.
• We won an important concession to ensure that anyone flagged by these mass surveillance powers can’t automatically be treated as guilty of wrongdoing. The DWP can only use the powers to assist decision-making, meaning an investigator will have to review the information received and additional information will have to be considered in order to prevent automated robo-debt style scandals.

Which benefits are within the scope of these powers?

At the moment, three benefits are included within the scope of these powers:

1. Universal Credit
2. Pension Credit
3. Employment and Support Allowance.

However, the law leaves open the possibility for more benefits to be added. The only exemption is state pension, which cannot be included under the bank spying power.

How do the debt recovery powers work?

If you owe money to the DWP, but are not in PAYE employment or no longer receiving benefits, you may have this debt deducted directly from your bank account.

Before this happens, the DWP debt management team will make multiple attempts to contact you by letter or phone over a four-week period to agree a voluntary repayment plan. If no contact is made, the case will be referred to the DWP debt enforcement team, who will make four further attempts at contact, including in writing.

If you do not respond, the DWP may contact your bank and ask them to hand over at least 3 months’ bank statements to check if you can afford for the debt to be directly deducted. Your bank are not allowed to inform you if this process takes place. The DWP can make this request to any bank you hold a bank account with – not just the one into which benefits were paid.

If the DWP decide you can afford to have the debt deducted directly, they will issue a ‘direct deduction order’. They will write to you, explaining that the debt is being recovered and informing you that you have a write to challenge the decision.

If you don’t reply within one month, the DWP will instruct your bank to deduct the funds, which will go directly to the DWP until the debt is repaid. The bank may be permitted to recover its administrative costs when carrying out this process, which it will also deduct directly from the debtor’s bank account.

The post What do the Government’s bank spying powers mean for me? appeared first on Big Brother Watch.

Source: https://bigbrotherwatch.org.uk/bankspying/what-do-the-governments-bank-spying-powers-mean-for-me/