Four people have been arrested in raids following an alleged £3million benefits fraud involving hundreds of innocent victims having their identities hijacked and stolen.
The suspected members of the gang were detained in dawn raids across south London and Berkshire, the Department for Work and Pensions has revealed.
The arrests were part of Operation Mellow, targeting an organised crime group thought to have obtained hundreds of stolen IDs to falsely claim Universal Credit and Personal Independent Payments.
Money and items valued at an estimated £150,000 were also seized, the DWP said, in an announcement led by transformation minister Andrew Western.
The four people arrested were taken into custody and questioned under caution by DWP investigators, before being freed on bail pending further enquiries.
The raids were carried out in collaboration with the Metropolitan Police in London and Thames Valley Police in Berkshire.
Sir Keir Starmer's Labour government has vowed to make fraud, error and debt activity savings worth £14.6billion by the end of the financial year 2030-2031.
The DWP has also forecast cutting fraud and error levels to 2.8 per cent by 2028-2029, which would be the lowest since tax credits were brought in in 2003-2004.
Transformation minister Andrew Western (pictured when elected MP for Stretford and Urmston in Greater Manchester in December 2022) has welcomed the latest arrests
Suspected members of an alleged fraud gang were detained in dawn raids across south London and Berkshire, the Department for Work and Pensions has revealed
Critics have branded the levels of fraud and error in the benefits system a 'national scandal' - with £6.35billion overpaid in 2024-2025.
The latest arrests followed 'months of collaborative hard work', the Government Agency Intelligence Network said.
Mr Western, minister for transformation in the DWP, said: 'This government is absolutely determined to root out fraud wherever it exists and pursue criminals who steal from the public.
'These arrests demonstrate the power of agencies working together and I want to thank the dedicated investigators from DWP and our policing partners for their tireless work on this complex case.
'We will continue to use every tool at our disposal to protect taxpayers' money and ensure our social security system only supports those who genuinely need it.'
A GAIN spokesperson said they were 'dedicated to disrupting and dismantling criminal enterprises', describing the raids as 'an excellent example of adopting a multi-agency approach'.
A Scotland Yard spokesman said: 'The Met is committed to tackling fraud across London.
'As part of this, we have been working with the Department for Work and Pensions, executing a number of warrants at addresses in south London.
Andrew Western (pictured alongside Sir Keir Starmer in January 2023) said: 'These arrests demonstrate the power of agencies working together'
'Fraud makes up more than 40 per cent of all reported crime and tackling it needs a whole-system approach.
'Officers will continue to work alongside partner agencies to target offenders and drive down crime rates across the capital.'
Almost £1 in every £10 spent on Universal Credit last year was wrongly paid, official figures revealed last August.
The Department of Work and Pensions admitted £6.35billion was overpaid in Universal Credit in 2024-2025.
That amounts to nearly 10 per cent of the £65.3billion of total expenditure on Universal Credit in the previous financial year.
The amount that was wrongly paid in Universal Credit included £5.2billion in overpayments due to fraud.
The main cause of fraud overpayments was an under-declaration of income by claimants of UC, which is paid to those on low incomes or who are out of work.
The second largest source of fraud was claimants failing to declare living with a partner, while the third largest reason was an under-declaration of financial assets.
The Covid pandemic saw a huge increase in fraud and error in benefit payments. A total of £9.5billion was overpaid in benefits in 2024-25, at a rate of 3.3 per cent
The Department of Work and Pensions admitted £6.35billion was overpaid in Universal Credit in 2024-25. This was almost 10 per cent of the £65.3billion of total expenditure
The main cause of fraud overpayments was an under-declaration of income by claimants of Universal Credit
Sir Keir last year ditched Labour's proposed restrictions to Personal Independence Payment (PIP), which is the main disability payment in England, until after a review.
He instead pushed through slimmed-down legislation in the House of Commons, now only referred to as the Universal Credit Bill.
As part of the Bill, the basic Universal Credit standard allowance will rise at least in line with inflation until 2029-30.
But the health part of the benefit will be reduced for new claimants after April 2026, unless they had a severe or terminal condition, and the rate will be frozen until 2030.
Earlier this month, MPs voted 458 to 104 with a majority of 354 to ensure the Universal Credit (Removal of Two Child Limit) Bill passed at second reading - paving the way for a scrapping of the two-child benefit cap.
It will be further scrutinised by MPs and peers before it can become law, but the Government has said it wants to ditch the two-child limit from April.
The policy, introduced by the previous Tory administration, currently prevents parents from claiming Universal Credit or child tax credit for a third or additional child born after April 2017.
The Office for Budget Responsibility has estimated scrapping the cap will cost taxpayers £3billion a year by 2029/30.
