‘Rife’ furlough fraud being revealed by whistleblowers

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Whistleblowers are unveiling fraud committed by UK employers that have used the furlough scheme to make large sums of money by falsely claiming employees are on furlough.

Charity Protect has revealed that about a third (36%) of its Covid-19-associated calls involved furlough fraud. The number, it said, has risen each week. It is thought that this trend may be connected with the HMRC’s decision to close its hotline after moving staff to work from home during the pandemic.

The other major whistleblowers’ charity, WhistleblowersUK, described fraud as rife. It said it had received calls from employees who claimed they had been threatened that they’d be sacked if they did not continue working after being furloughed.

HMRC said it had received 795 written or online complaints about furlough fraud up until 14 May, despite the closure of the hotline.

Baroness Kramer, co-chair of the all-party parliamentary group for whistleblowing, told the Telegraph: “At a time like this when we as taxpayers are stepping forward to give people a lifeline, this abuse seems even more outrageous than it might under normal circumstances. Taxpayers are feeling the pain.”

Three main types of fraud have been identified:

  • A company furloughs staff but asks them to continue to work or volunteer unpaid.
  • Companies furlough staff without telling them. The workers only find out when they are paid.
  • A company claims furlough money for a “ghost” employee who may be someone they dismissed or “recruited” so they could claim the money.

The Telegraph cites the case of a software developer for a medium-sized business, who revealed to the newspaper he was summoned by his bosses and told he would be furloughed, but that he should continue to work from home. If he refused, they told him he would be fired.

He decided to call their bluff, saying he would not participate in a fraud and would take them to an employment tribunal if they fired him. He recorded all his conversations including one in which they named other employees who were party to the scam.

The company appeared to back down and he continues to work but still believes he may have to make good his tribunal threat.

Liz Gardiner, chief executive of Protect, urged HMRC to restore its hotline because of the risks of missing scams without it and then to investigate: “Our experience is that this is a new emerging problem that needs to be tackled.”

Georgina Halford-Hall, chief executive of WhistleblowersUK, said it was forcing law-abiding people to break the law or face the sack: “You can see the absolute terror that good people are experiencing.”

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One Response to ‘Rife’ furlough fraud being revealed by whistleblowers

  1. Avatar
    Fulano de Tal 20 Jun 2020 at 10:26 am #

    I am in this dilemma and feel that my employment position is compromised. I was placed on the furlough scheme despite the fact that my type of job requires a certain degree of tasks to keep an important aspect of the company up and running. The type of role I do ‘can clearly be carried out working from home’, hence my employers had no valid reason to select me as a candidate for the furlough scheme.

    Several colleauges have also been furloughed and are making revenue for the company but they are happy and comfortable with it. I contacted ACAS for advice regarding my concerns over the predicament I find myself in but they were just as flummoxed as me on what I can do about it!

    I hope the HMRC investigate the companies that have signed up for the scheme as it seems too much like easy free money to me.

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