Cornwall Council has ordered a review of all council tax payers who are receiving a single person discount on their council tax bills.
Latest figures show around 78,000 households in Cornwall are currently claiming the 25% discount which costs £23.5 million a year.
The council has appointed CAPITA to carry out the review to identify where people may be inappropriately claiming the discount.
The council said it was determined to take action to identify those who claimed the discount for which they were not entitled.
Councillor Fiona Ferguson, the council's portfolio holder for corporate resources, is supporting the review.
"Apart from the need to protect the public purse from fraud, this is a simple matter of fairness," she said. "It is especially important when people in Cornwall who are paying the correct council tax are struggling as a result of the current economic climate."
Over the next few weeks, CAPITA will be using data from a credit reference agency, alongside other up-to-the minute data technology, to identify correct and incorrect claims.
