HOUSEHOLDS are being warned over a Universal Credit scam that could leave them out of pocket.

The Sun first warned in November 2018 that a loophole allowed fraudsters to claim cash by making fake advance payments.

The scam sees fraudsters take out a so-called Universal Credit budgeting loan in someone else's name.

These budgeting loans have to be repaid, but the scammers typically disappear with the cash leaving you with debt to repay.

In 2019, one mum lost her £780 a month benefits after a fake loan firm signed her up for Universal Credit and stole her cash.

Meanwhile, another woman was recently chased by debt collectors for a £1,480 Universal Credit claim she hadn't made.

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Crooks had simply applied for the benefit, requested a Universal Credit advance payment and then never paid it back.

The advance payments are emergency loans to help you get through the five-week wait for your first Universal Credit payment.

The DWP has now issued a new warning as scammers make the most of the cost of living crisis to exploit the social security system.

A spokesperson told BirminghamLive: "The vast majority of claims to Universal Credit are legitimate and fraud and error in the benefits system remains very low, with 96.5 per cent of benefits paid correctly.

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"We continue to monitor and investigate emerging fraud threats and pursue those seeking to rip off the taxpayer using the full range of our powers, including prosecuting and tough financial penalties."

In May, the DWP launched a £613million plan to put an end to the billions of pounds being lost in benefit mistakes and fraud.

A new team of 2,000 staff has been hired to comb through more than two million Universal Credit claims that could be incorrect or are suspicious.

It means the DWP can execute warrants, search and seize evidence, and even make arrests while tracking down these claims.

How to protect yourself against fraud

If you think you've been scammed, the first point of contact is to call the DWP.

You should also call your bank immediately using the number on the back of the card, and report it to Action Fraud.

There are a number of ways to protect yourself from fraud from happening in the first place.

For example, it's worth shredding and destroying documents that contain personal information before throwing them away.

You should also never respond to or engage with cold calls or emails asking for personal information or account details.

Other ways include registering to vote at your current address,monitoring your post regularly and having your post redirected if you move house.

As always, be careful about giving away too much information on networking websites and always use unique passwords.

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We also explain why your Universal Credit payments could be cut.

Plus, we round up 11 ways to get extra cash.

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