He was trying to do everything by the book.
First mistake right there.
I'm not saying do anything dodgy, but playing by the rules is guaranteed to have the JC
**** you over every time.
I've seen it time and again - you try and do the right thing and you pay for it. You bend the rules as much as possible and you get what you want.
In this instance, I'd have been economical with the truth and not said anything about going abroad. It's not like he'd have been placed on a border agency watch list for being on jsa
Sadly you have to know how places like the jobcentre operate and play them at it to your advantage. That sounds bad but it's the only way to not get screwed by them. Unfortunately for your father-in-law the cat is already out of the bag.
As for owing them money, that sounds like JC scare-tactics to me.
Now, damage limitation, I'd try the signing off followed by a rapid reclaim. I don't know if you can do this over the phone (so you don't have to see the same JC staff - chances are unless he was at an appointment etc the conversation will not have been noted down on his claim). Last time I signed off I just handed my book in to the reception staff without any chit chat with the signing off bit filled out. You can post the signing off book through the jobcentre door too, by the time anyone gets to processing it, you'll probably be back un the uk anyway
Say he thought he was going to get a temp job, but it just turned out to be registering with another
******** agency who like to get you on the books but never actually supply you with work. The agency in question was contacted outside of the JC and not through any of their recorded systems. There's plenty of them out there.
But as I said before your FIL has shot himself in the foot already, so take anything I say at this point under advisement.
Sometimes I despair that being honest gets you nothing these days.