§ Mr. DrewTo ask the Secretary of State for Work and Pensions if he will make a statement on his Department's policy on fraud in the payment of benefit through post offices; and what plans he has to protect against fraud when the post office card account is introduced. [88245]
§ Malcolm WicksPaper-based instruments of payment can be vulnerable to fraudulent attack in a number of ways: they can go astray in the post, be lost or stolen, or be manipulated or counterfeited by a determined fraudster. We estimate that total benefit and pension losses from paper-based instruments of payment fraud in 2000–01 were around £77 million.
We have several measures in place to counter fraud, such as the Order Book Control System (OBCS). This makes use of barcode readers in post offices to scan order books that have been printed with a barcode on the front cover. OBCS alerts the post office clerk when a stop notice has been placed on an order book and instructs them to impound the book immediately. Crucially, the stop notice is activated in whatever post office the book is presented for payment and not only in the customer's designated post office. This helps to ensure that order books reported lost or stolen are not cashed, but instead impounded.
648WIntroducing direct payment into a bank, building society or post office card account as the normal method of benefit payment for the Department's customers will result in significant savings to public funds. It is a much more secure method of payment. Work is on-going to develop a more secure method of payment to replace existing order books and girocheques for those customers who cannot or choose not to be paid by direct payment.
The post office card account is a Post Office product and detailed operational questions are the responsibility of the chief executive for the Post Office. However, the Department's officials will continue to work in close co-operation with the Post Office to ensure that the card account is as secure as possible.