Fraudbusters to the rescue?

As part of the government’s desire to keep struggling businesses afloat as a consequence of the lockdown measures, it introduced bounce back loans, which instructed banks to issue at great speed and with minimal checks. Not surprisingly, fraudsters were quick to take advantage and it is estimated that up to £5 billion of fraudulent loans were issued. 

Barclays is proposing to bring an outside firm to hunt down fraudsters and other banks may follow. Under the proposal Barclays would issue winding-up petitions, with a view to the liquidator selling the right to pursue payment of the debt to a third party, who would do so via the courts.

It is already no longer possible to simply dissolve companies who have taken out a bounce back loan, with companies now having to go though a formal insolvency process. 

Time will tell who will be interested in purchasing the claims and fund action to go after fraudsters. No doubt the willingness to do so, will very much depend on whether the fraudster and their assets can be traced.

My guess is that whilst some of the money may be clawed back, an awful lot of the money fraudulently lent will be gone forever. The best one can hope for is that valuable lessons have been learned.

BARCLAYS bank is drafting in a crack squad of fraudbusters to claw back up to £1 billion of Covid loans that have been siphoned off by criminals.

https://www.mailplus.co.uk/edition/money/city-finance/195635/barclays-to-hunt-down-the-1bn-covid-crooks