Over £1.1 billion of suspected fraud via the government’s bounce back loan scheme has been prevented by lenders so far, an indication of how criminals have aggressively targeted the scheme.
Estimates from the British Business Bank provided to the Commons public accounts committee said lenders had rejected 26,933 bounce-back loans over concerns they could be fraudulent preventing criminals from stealing £1.1 billion from the £40 billion scheme.
In a letter published by the British Business Bank (BBB) to the House of Commons’ public accounts committee (PAC). BBB chief executive Catherine Lewis La Torre said that almost 27,000 suspicious loan applications had been rejected by lenders since the scheme’s launch in May.
Last month a report by the National Audit Office (NAO) warned that significant amounts of taxpayers’ money could be lost to fraud linked to the bounce back loan scheme, which was designed to support businesses through the economic disruption caused by the coronavirus pandemic
The committee heard evidence that the take-up of the scheme was larger than expected, with lenders issuing over £60 billion in coronavirus loans for business. The majority of emergency financing has been through the bounce back loan scheme (BBLS) to small businesses, rather than the coronavirus business interruption loan scheme (CBILS) designed for larger businesses.