UK data watchdog the Information Commissioner's Office (ICO) is seeking clarification concerning government proposals to use credit reference agencies to combat benefit fraud.
Information Commissioner Christopher Graham has written to welfare reform minister Lord Freud to request a meeting, and has personally urged the government to consider the data protection implications of these plans at the earliest stage.
"The Data Protection Act is not a barrier to sensible information sharing, and some sharing already takes place with credit reference agencies. However, it appears that these latest proposals may go further," said an ICO spokesperson.
The ICO's concerns centre on the amount of information given to benefit claimants about how their personal data will be processed.
The spokesperson said that, while it is "reasonable" that benefit fraudsters should expect information to be shared with the appropriate authorities, "any information sharing should be made clear in privacy policies".
Teresa Perchard, director of policy at Citizens Advice, also voiced concerns about the government proposals.
"Citizens Advice sees people every year who have been victims of identity fraud and are being chased for debts that aren't theirs," she said.
"It is very hard for people in this situation to prove their innocence. The government needs to be aware that it could be all too easy to make mistakes based on wrong credit reference information."
Credit reference agency Experian is expected shortly to begin working with the Department for Work and Pensions.
Experian is likely to trawl through new and existing benefit claimants' household bills, credit card applications and other records in a bid to cut the £5.2bn annual bill for benefits paid in error or as the result of fraud.
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