‘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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