Monday, 17 January, 2022

UK rush to give Covid loans caused big fraud

UK rush to give Covid loans caused big fraud

Popular News

LONDON: A UK government rush to hand businesses emergency loans during Covid resulted in fraud worth an estimated £4.9 billion, reports AFP.

The country's spending watchdog National Audit Office (NAO) said on Friday in a report that "the impact of prioritising speed is apparent in the high levels of estimated fraud".

The Conservative government of Prime Minister Boris Johnson last month had already estimated that its so-called Bounce Back Loan Scheme led to fraudulent claims totalling the equivalent of $6.5 billion or 5.7 billion euros.

"Counter-fraud activity was implemented too slowly to prevent fraud effectively," the NAO said Friday.

The watchdog said "the Scheme facilitated faster lending by removing credit and affordability checks and allowing businesses to self-certify" applications. The NAO noted that the government also ruled out additional counter-fraud measures when the Scheme was extended.

Under the Scheme, Britain offered loans of up to £50,000, or a maximum of 25 percent of a company's annual turnover, to help them survive the pandemic.

In figures released by the government in late November, a total of £46 billion had been loaned, while only around £3.5 million had been recovered from fraudulent borrowing.

The taxpayer could meanwhile lose out also from businesses that legitimately borrowed under the scheme failing to repay their loans.