Sorry about ranting about this again but everytime I see or hear bounceback loans makes my blood boil
https://cardealermagazine.co.uk/publish/bounce-back-loan-fraud-five-time...
These simple and obvious checks could have prevented fraudsters accessing bounceback loans.
1) Having at least one year accounts filed and not giving any loan to any business just setup recently
2) Checking Turnover
3) Checking the Director is actually in the UK. I imagine lot of the fraud are carried are from overseas.
4) Checking Director has not applied for more than one bounce back loans. Looks like this is quite common,
5) Robust Identity Checks. It seems some fraudsters have used someone elses identity to apply for these loans. If banks are not able to prevent identity fraud then we have a serious problem with Money Laundering
On the other side tthere are businesses recently setup and taking the 50K loan for personal use. The loan should have been given to businesses that have been trading for at least one year and actually have more than one employee (excluding the directors). Secondly, making it compulsory for the director to report back on the use of the 50K and marking clearly on the application any illict use of the loan will be recovered from the director personally.
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Replies (18)
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If they had then BBLs would have been lean pickings.
Doubt I would have got one given that bank surreptitiously withdrew my overdraft. Had not used it for a three years or so, but no notice given.
It's easy to be wise after the event once the panic has abated. There was always an inherent compromise between speed and resistance to fraud.
With directives to work from home and with many people furloughed, the additional measures you suggest could have made turn-round times on loan applications weeks instead of days.
The headline saying 'fraud five times higher' misleads. It invites us to believe there have been huge levels of fraud. But five times higher than very low is still low.
Yes speed of an essence but these checks would not have taken too long to do
I think even two minute checking companies house would have stopped giving loans to new businesses. Some of the checks can be done very quickly.
I wouldn't be surprised if the government does not recover 50% of the bounceback loans. Fraud and dishonesty is so widespread having come across so many cases. For example taking the full amount of the loan when turnover is less than 100K
Yes speed of an essence but these checks would not have taken too long to do
How do you propose that the turnover figures on an FRS105 company were checked?
Will be interesting to see what happens when the loans start to default. Some senior bank officials are more than a little concerned that the government guarantee will not be forthcoming if it is obvious that the bank does not have up to date KYC data that is part of the money laundering requirement.
Annoyingly, due to the dumb "new exciting edit block function", I have to add this edit as a new comment: https://www.bbc.co.uk/news/business-55323340
So what (about the edit issue)?
(a) If a post is worth amending (beyond typos etc) it is worth a new post
(b) a fresh post is more likely to be read than an amendment to an existing post, especially if that orginal comment is old and/or in the middle of a long thread.
If what you mean is that I'm far more likely to read a new post/thread than dig through old threads on the off-chance that someone might have edited a comment first posted over a year ago, then you're spot on.
I'm not sure Car Dealer Magazine is the news source I would go to for my financial news.
In any event, the vast majority of loan defaults will be from businesses who have taken a loan to meet expenses knocking a £50,000 hole in their balance sheet that they have no means of recovering from, and the focus on fraud (while no doubt widespread) is a complete red herring.
Heard this one yesterday (on a no names basis) from a contact.
One guy 5 Companies x £50K=£250K BBL's trousered.
All Companies shut down after monies transferred abroad.
He has now moved to Spain, ahead of the Brexit shambles, and retired.
Chances of HMRC or bank getting the money back....... Zero I reckon.
And if you're a sensible, self-respecting scallywag (and there are 1,000s of them as we all know), why on earth wouldn't you do something that simple? (And that's our money don't forget, being wonderfully mismanaged by the dumbos we all know.)
Indeed, I strongly suspect that he strongly regrets not having several more companies kicking about to do all that.
You're right what self respecting scallywag wouldn't.
Imagine the knock on your street cred if you hadn't claimed at least a couple of BBL's and bumped at least 2 Companies given the golden opportunity handed to you on a plate by the Government.
