Municipalities’ fraud profiling algorithm angers labor union

The FNV union has filed a complaint with the Dutch Data Protection Authority (AP) against the municipalities of Nieuwegein, Houten, IJsselstein, Lopik and Veenendaal. To prevent benefit fraud, these five municipalities used a so-called fraud scorecard when applying for benefits until last June.

The algorithm would encourage discrimination by labeling groups of people as high-risk based on an automatic profile, such as trailer dwellers, construction workers and single people living in a "worse neighborhood."

The fraud scorecard was used by no fewer than 158 municipalities from 2004 until a court ruling in 2020. That the subsequent communities were still using the fraud scorecard came to light last June after an investigation by a journalist collective from Lighthouse Reports, Argos and NRC. The FNV then set up a hotline where beneficiaries could check for themselves whether they had been flagged as potential fraudsters when applying for benefits. The hotline received 165 reports shortly afterwards.

FNV vice-chairwoman Kitty Jong expects the AP to fine the five municipalities. "Despite all the warnings, these municipalities have continued to use risk indicators that were also used in the benefits affair," she said. "I expect stronger and stricter monitoring anyway, as the AP will be looking more closely at monitoring the use of algorithms in addition to processing data."