UK Watchdog Attacks ‘Inadequate’ Effort to Tackle Covid Loan Fraud
The UK government’s measures to prevent fraud in its bounce back Covid loan scheme for small businesses were “inadequate” and it needed to do more to recoup the estimated £5bn that was stolen, according to parliament’s spending watchdog.
The National Audit Office also highlighted in a report on Friday the Department for Business, Energy and Industrial Strategy’s (Beis) focus on organised crime’s exploitation of the programme, raising the risk that smaller fraudsters will escape unpunished.
Meg Hillier, Labour chair of the House of Commons public accounts committee, said the report showed that counter-fraud measures had been “too little, too late”.
“It’s now focusing on recovering money from organised crime, yet many of the smaller scale fraudsters will have slipped through its fingers,” she said.
The bounce-back scheme, launched in May 2020, guaranteed bank loans of up to £50,000 to support businesses during the pandemic. It was designed to deliver loans as quickly as possible, with limited verification and lenders performing no credit checks.
It proved popular, with around a quarter of all UK companies applying. But the cursory checks, according to the NAO, “made it vulnerable to fraud and losses”.
Official estimates suggest that close to £5bn of the £47bn disbursed could be lost in the fraud.
As of the end of March 2021, lenders claim to have prevented £2bn of fraudulent applications and detected £5.3m of fraudulent loans.
https://swiftheadline.com/uk-watchdog-attacks-inadequate-effort-to-tackle-covid-loan-fraud/