AI Tool Helps UK Government Recover £500m from Fraud

The UK government has recovered almost £500m through a new artificial intelligence fraud detection tool over the past year, marking the largest sum ever reclaimed by government anti-fraud teams in a single year. More than a third of the recovered funds related to fraudulent activity during the Covid-19 pandemic, with additional money recouped from unlawful council tax claims and illegal subletting of social housing.

Context and Background

The Cabinet Office developed the AI tool, called the Fraud Risk Assessment Accelerator, in response to widespread fraud during the pandemic. The system recovered £480m between April 2024 and this month, with £186m specifically related to Covid fraud. This includes blocking hundreds of thousands of companies with potentially fraudulent Bounce Back Loans from dissolving without repaying the money.

The recovered amount represents a significant achievement in fraud detection, though it remains a fraction of the estimated £7bn that Chancellor Rachel Reeves claimed was lost to fraud during the pandemic. One notable case involved a woman who invented a company and sent the loan money to Poland, highlighting the sophisticated nature of some fraudulent schemes.

Looking Forward

Cabinet Office minister Josh Simons will announce at an anti-fraud summit that the UK will now license the AI tool for international use, with the US, Canada, Australia and New Zealand expected to adopt it. The tool “scans new policies and procedures for weaknesses before they can be exploited” and aims to make policies “fraud-proof” before implementation.

However, the expansion raises concerns among civil liberties campaigners who have previously criticised the government’s AI use. Last year, an AI tool for welfare fraud showed bias based on age, disability, marital status and nationality, whilst Amnesty International has criticised the government’s “unchecked use of tech and AI systems”.

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