The Information Commissioner’s Office (ICO) has warned the government that it risks breaking data protection laws with its planned benefit fraud crackdown.

The government is aiming to reduce benefits paid in error and make it harder for those intentionally defrauding the benefits system. But the ICO has warned the government not to overstep the mark when it comes to information sharing, its main weapon in the planned crackdown.

An ICO spokesperson said, “The ICO is seeking further clarification from the Department of Work and Pensions in relation to the government’s proposal to use information provided by credit reference agencies to combat benefit fraud.

"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 the latest proposals may go further. The details in relation to these plans therefore need to be further explored."

Information Commissioner Christopher Graham has written to welfare reform minister Lord Freud suggesting a meeting. He writes, "I hope the government is going to hold to the good practice of considering the data protection implications of policies at the earliest stage.

“A common sense approach should be applied to information sharing. This includes letting people know how their information will be processed."

He adds, "Most organisations make it clear that should they need to they will share details with authorities for the prevention and detection of crime. It is reasonable to expect that if you are committing benefit fraud your details will be shared with the appropriate authorities dealing with this. But any information sharing should be made clear in privacy policies."