Hidden Links Between Human Trafficking and Benefit Fraud: Key Findings from the FRAUD Report

A new pilot study from the FRAUD project, led by the CBSS, reveals how human traffickers exploit vulnerable individuals and welfare systems through benefit fraud, turning it into a significant yet overlooked financial crime.

Human trafficking and benefit fraud are increasingly interconnected issues in the Baltic Sea Region, where traffickers manipulate the personal data of vulnerable individuals to exploit welfare systems for financial gain. Despite growing concern, there remains a substantial gap in evidence-based research, legal clarity, and general knowledge. To address this, the CBSS-led and Swedish Institute-funded FRAUD project  has been working to uncover the hidden links between human trafficking and welfare-related crimes, focusing particularly on benefit and financial fraud. 

A key component of this initiative is the pilot study Human Trafficking for Benefit Fraud and Related Financial Fraud: Securing a Steady Revenue Stream, conducted by Associate Professor Märta Johansson of Örebro University. This study provides a legal conceptualisation of benefit fraud in the context of human trafficking and examines the connection between benefit fraud, greater financial fraud, and human trafficking. The study also explores whether the victims of such schemes can be considered human trafficking victims under international legal frameworks. 

Key findings from the study: 
  1. The study analyses the relationship between human trafficking and benefit fraud, including related financial fraud. It investigates whether the exploitation of people and their information in benefit fraud schemes meets the international legal standards of human trafficking.  
  1. The study defines benefit fraud as fraud specifically targeting welfare states and diverting funds meant for people in need. Unlike fraud against private organisations, benefit fraud can serve as a significant income source for traffickers, especially when multiple identities and data are exploited. 
  1. The study identifies four primary modes of exploitation within benefit fraud: 
  • Human trafficking plus – involves traffickers taking the welfare/social benefits of victims who are already trafficked in another way, such as in forced labour, as an additional revenue stream. 
  • Identity/data exploitation plus – relies on victim’s identities and data to receive benefits, commit financial crimes, or help provide legal status to another person. 
  • Cost reduction strategies – involve employers underpaying or refusing to pay workers with a vulnerable legal status, while billing the state for their work and keeping the benefits for themselves. 
  • Benefit theft as the primary aim – is the last mode and refers to cases where individuals are exploited exclusively for their social benefits.  
  1. The study examines international legal frameworks related to human trafficking and outlines the necessary criteria for cases to qualify as trafficking. These criteria include the purpose of exploitation, the means of trafficking, and the specific actions taken. 
  1. The study raises questions about unclear legal boundaries and whether identity and financial exploitation can be considered trafficking. It is uncertain whether the victim’s criminal history or exploitation are necessary factors to consider under human trafficking laws.  
  1. The study also highlights notable national convictions. For example, Denmark has successfully prosecuted traffickers for exploiting victims’ identities and data in benefit fraud schemes. This precedent indicates that some courts recognise these crimes as human trafficking. However, a standardised international legal framework addressing identity fraud for financial gain has yet to be established. 
Seminar on Human Trafficking and Benefit Fraud

On 13 March 2025, the Swedish Parliament in Stockholm became the stage for a crucial discussion on combatting human trafficking. It hosted a seminar organised by the Social Democratic Party (S) and the Moderate Party (M) of Sweden, discussing these key findings and their implications for anti-trafficking efforts. During the seminar, Dr. Märta Johansson presented the latest CBSS study, highlighting the urgent need for further research, legal clarity, and stronger enforcement mechanisms to tackle this pressing issue. The findings sparked insightful discussions on how to enhance anti-trafficking efforts across the region.  

The FRAUD project sheds light on a critical but underexamined aspect of human trafficking. As identity fraud and financial exploitation within welfare systems increase, it is crucial to establish international consensus on identity exploitation within trafficking laws. Recognising benefit fraud as a form of human trafficking is essential to better protect victims and safeguard public welfare funds from criminal abuse.