Connect with us

Hi, what are you looking for?

Editor’s Pick

Fraudulent Bounce Back loan application prosecutions – what the landscape looks like

It has taken a while but we now have a much clearer picture of what enforcement action and prosecutions for Bounce Back Loan fraud looks like.

The latest figures quoted by the National Audit Office suggest that between £3.2 and £6.3 billion of the total cost of the Government’s £96.9 billion emergency Covid-19 support, was claimed in error or fraud.

In November 2020, the National Audit Office was critical that no credit checks were used in the Bounce Back Loan Scheme – as a consequence unviable businesses were given access to the loans. It was predicted at the time that as much as £26 billion could be lost to fraud.

The Bounce Back Loan Scheme was brought in too quickly for a fraud prevention strategy to be implemented, giving a window where fraudulent claims would go unmonitored.

Banks were expected to use their own enforcement powers to monitor applications and close down those businesses they suspected of fraud. It was only in September 2020 that banks started to get to grips with the backlog. We know that 150,000 ineligible claims were blocked.

Lord Agnew, (Pictured above) The government’s former counter-fraud minister, has said that many banks did not run thorough checks on borrowers before handing out loans through the scheme, claiming that Starling Bank was “one of the worst”. Starling has robustly denied the allegation.

Jeremy Asher, Consultant Regulatory Lawyer, Setfords explains how these fraudulent cases being chased, and what is happening to the perpetrators?

A suite of different enforcement action is now taking place:

Firstly, the banks identify suspicious applications and use traditional anti-fraud measures such as Cifas markers after issuing default notices, closing down and freezing accounts – these markers block access to credit and banking facilities for 6 years. Challenging such decisions is a difficult, technical and specialist area of law. Where default notices are issued repayment plans are negotiated with the banks.

The Insolvency Service takes the cases where it is apparent that businesses have been wound up. Companies House is now refusing to allow applications by companies wishing to be struck off the register which had previously applied successfully for Bounce Back Loans.

The National Investigation Service is now actively investigating cases notified to it by BEIS where fraudulent applications have been flagged, and is working with the CPS to bring criminal prosecutions.

In the most serious cases, the Proceeds of Crime Act will be used to make Confiscation Orders for the recovery of the funds following successful criminal prosecutions.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

News

DRAHOMÍR POSTEBY-MACH -PIXABAY BERLIN — The founder of Russia’s only LGBTQ+ museum said he was forced to close its doors on Wednesday after President...

News

REUTERS Philippine lawmakers are looking to tap central bank profits to seed a proposed sovereign wealth fund, after an earlier plan to use pension...

News

REUTERS Presidential elections drove this year’s Google searches in the Philippines as “Halalan 2022” topped the overall list of trending searches and “precinct finder”...

News

Men and women line up during a job fair held inside a covered court in Tondo, Manila, Nov. 21. — PHILIPPINE STAR/ EDD GUMBAN...

News

THE NATIONAL GOVERNMENT’S (NG) outstanding debt hit a record high of P13.64 trillion as of end-October, driven by more domestic and foreign borrowings, the...

News

REUTERS MANUFACTURING rose for a fifth straight month in October, reflecting the continued reopening of the Philippine economy, analysts said. Preliminary results of the...

You May Also Like

News

BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...

News

REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...

News

KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

News

COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.