A “LONG-HELD” principle of privacy over financial information is being “thrown away” by plans by the DWP to monitor bank accounts of benefit claimants, campaigners have warned.

New legislation going through parliament includes an amendment to hand powers to the Department of Work and Pensions (DWP) to require banks to provide information on certain accounts which meet specified criteria, such as exceeding a certain balance limit or being used abroad for an extended time.

But the move has sparked a huge backlash from privacy campaigners, who say a long-held privacy guard over financial information is “being thrown away”.

READ MORE: The truth about DWP plan to spy on benefit claimants' bank accounts

The Information Commissioner’s Office (ICO) has also warned the measure involves “significant intrusion” and there is not yet “sufficient evidence that the measure is proportionate”, the Sunday National can reveal.

The new powers – which are said to be also intended to cut down overpayment mistakes in the benefits system - are being introduced under an amendment to the Data Protection and Digital Information Bill (DPDI Bill), which is currently progressing through the Lords.

Silkie Carlo, director of Big Brother Watch, said one major issue was the banks would have to run automated scanning to identify benefit recipients as they would “not be given a list of names”.

“The way this system will work is banks will be served with a notice to flag for certain criteria which means they will have to run this algorithmic surveillance over all of their accounts – there is no other way to do it,” she said.

“They are being given a set of criteria, which is secret and which hasn’t been set yet, and also which doesn’t need to meet a reasonable suspicion threshold. It is more like criteria that could be precursors to potential fraud, so it is incredibly broad.

“I think everyone ought to be concerned that the Government is asserting the right to investigate their transactions and their bank accounts regardless of whether you are on benefits or not.”

She added: “There is the principle privacy issue and the fact that a very, very important long-held privacy guard over our financial information is being casually thrown away.”

READ MORE: DWP plan to monitor benefit claimants' bank accounts

Carlo said there was also a concern over the practicalities in terms of the margin of error involved in such system, meaning “potentially thousands” of people are likely to be wrongly flagged to the DWP.

The DWP says the information provided will only be on potential fraud and error, and decisions will continue to always be made by a member of staff.

But Carlo said: “If you are subjected to a review, these are often really onerous - they require a lot of bureaucracy, of administration, of documentation and this is in relation to people - many of whom are the most vulnerable in the country and may have mental health problems or learning difficulties or physical disabilities.”

She said it was important to tackle the misuse and fraud of public funds as it is an “incredibly serious” issue.

But she added: “Yet for the whole country’s financial privacy to be invaded as a bureaucratic measure - I think is really quite astonishing that the DWP sees it as fit to do that."

The UK Government say fraud and overpayment currently cost the DWP in excess of £8 billion a year.

READ MORE: Scottish minister writes to DWP over 'concerning' benefits rules change

Figures provided by the DWP state the new measure is expected to save around £1.9bn over the next 10 years.

In a response to the DPDI Bill, UK Information Commissioner John Edwards said while it is ultimately up to Parliament to satisfy itself the change is necessary, the ICO has a role to provide a view which is “particularly important given the significant intrusion that this measure allows".

The response stated: “While I agree that the measure is a legitimate aim for government, given the level of fraud and overpayment cited, I have not yet seen sufficient evidence that the measure is proportionate.”

A DWP spokesperson said: “It is untrue to suggest these changes will allow DWP direct access to bank accounts or affect how benefit decisions are made.

“Third parties will be required to share data signalling fraud with us so it can be considered further, but members of staff will continue to always take any decisions.

“We have a duty to spend taxpayer’s money responsibly – which is why we are cracking down on fraud with new powers to save £600 million over the next five years and root out those who steal from the most vulnerable.

“This is on top of the billions being saved through our counter fraud plan and will be targeted at areas where fraud and error is highest, such as Universal Credit.”