Bouncing Loans: Rishi Sunak Discusses New Program
The National Audit Office (NAO) recently revealed that taxpayers could lose up to £ 26bn due to fraud, organized crime or the failure of Chancellor Rishi Sunak’s rebound loan program. Since BBL’s inception in April, fraudsters have been able to steal victims’ personal data by using phishing emails or buying them from criminal forums. Fraudsters can then set up a bogus business on their behalf.
After opening a business bank account, they then apply for a bounce loan from the same bank.
Victims may not even know they’ve been scammed unless they attempt to take out another loan and find out they have a Cifas brand, which shows potential lenders that they are vulnerable. fraudulent attempts to contract credit on their behalf.
Jeremy Asher, who leads MSB’s private prosecution team, outlined the steps that lead fraudsters to gain access to the BBL system.
He told Express.co.uk: “The long-term ramifications of scams are worrying.
“It’s amazing, it has all been like a national disaster.
“We are the victims. Are we going to pay this for years with our taxes?”
Rishi Sunak unveiled government Bounce Back loans in April
He added that the “main motivating factor” of the government was speed in launching the program.
Mr Asher said: “She was aware that Germany and Switzerland already had their own bounce loan programs in place, both of which offered guarantees in that companies were not allowed to self-certify. ; were not allowed to use the loans to repay existing loans, and could only use the loans in certain circumstances to pay dividends.
“Compare these guarantees with the UK government’s system, in which none of these guarantees were imposed, as the government wanted to release funds to businesses within 48 hours of the request, when the usual time it would take for banks to process these requests takes between four and 12 weeks.
“Banks and intelligence agencies weren’t ready for the program to launch – it took them about a month to upgrade, by which time huge sums of money were already on loan.
READ MORE: UK taxpayers face £ 26bn bill due to fraud
The government’s goal of the BBL program was to help people who needed support as quickly as possible
“Gradually, the banking guarantee system, including fraud reference agencies such as CIFAS, lender due diligence and post accreditation audits, began to take effect.
Mr Asher added that it is unlikely that it will be known how many companies are in default until May 2021.
He said: “The reporting system (portal) used by banks does not highlight the risk of fraud.
“The British Bank provided training to banks on best practices, but there was insufficient time to avoid duplication of requests.
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The coronavirus pandemic has hurt many small businesses financially
“The self-certification process meant there was no credit check when banks went to lend to existing customers. Non-viable businesses were able to access the loans.”
Mr Asher also explained that Cifas markers stay there for six years without detection unless people try to apply for a credit or loan and realize they now have a mark.
He told Express.co.uk: “People are categorized as scammers and they just don’t know it!”
A spokeswoman for the Cifas fraud prevention service said there are ways for people to find out if they have this mark on their credit score.
The spokesperson told Express.co.uk: “Anyone who wants to know what details are held about them in the National Fraud Database and which organization has placed them there, can request access to the topic. via the Cifas website.
Cifas markers stay there for six years without detection unless people try to apply for credit
“They are then advised to contact the organization that registered the marker and follow their complaints procedure.”
A government spokesperson said the aim of the BBL program was to help people who needed support as quickly as possible.
He told Express.co.uk: “As the NAO rightly points out in this report, our loan programs have provided a lifeline to thousands of businesses across the UK – helping them to survive the epidemic and protect millions of jobs.
“We have targeted this support to help those who need it most as quickly as possible and we make no apologies.
“We have sought to minimize fraud – with lenders implementing a range of protections, including anti-money laundering and customer checks, as well as transaction monitoring checks.
“Any fraudulent claim may be subject to criminal prosecution for which penalties include imprisonment or a fine or both.”