People who claim fraudulently will have to provide evidence, and that can be done, if you're willing to see umpteen Drs about a made up condition...
And are still at risk of being caught for that fraud when it is reported to them that said person is seen doing things that contradict their claim. They then risk a/paying back the entire funding they've had and b/prison.
If someone is claiming they can't go out and is then repeatedly seen out, thats pretty cut and dried.
However some people will let on that they claim for one thing, but really they've claimed for something else... then this is why it may appear people get away with fraud.
I know tons of people who claim social anxiety but then do all manner of things I cannot do. I do not know if they get PIP for that or for something else, only DWP and they know that, and I also have no idea what they have to do to make those activities possible, what the context of their social anxiety is, how long it takes them to recover from an activity etc etc.
I can see why some people might tell others they have an invisible condition, because they don't want to reveal other conditions - I'd be much more willing to talk about anxiety than about being unable to wipe my own bum!
You can of course report suspected fraud to the DWP - but I agree with a PP there should be some checks and balances on that too, a system where by if it turns out your report IS malicous, you may face consequences!
Then of course the only reports made would be those with clear evidence that the reporter knows the persons claim details AND that they're contravening that claim. This would probably save DWP time and money in dealing with lots of spurious 'Widdlin's stood up out of her wheelchair in Tesco last Friday, she's clearly a faker' type reports.