COVID bounce-back loan frauds

[island]

In news that is unlikely to surprise many of you, £17bn of the £47bn paid out in COVID "bounce back loans" is now considered unlikely to be repaid, with the British taxpayer on the hook for every penny. As much as £4.9bn of the drawings were considered out and out fraud.

I sat through this in a mid-size bank in Q2 2020 with massive clamouring for money to be shovelled out the door.

More in the Times.

The Times & The Sunday Times

News and opinion from The Times & The Sunday Times

www.thetimes.co.uk

Suitcases filled with cash from taxpayer-backed Covid loans were seized at the border as people tried to smuggle them out of the country, a Times investigation reveals today.

Border force officials have stopped people at airports across Britain “carrying large amounts of money suspected from coronavirus bounce-back loans”, a Home Office source said.

Other recipients of financial support during the pandemic used the money to fund gambling sprees, home improvements, cars and watches, it has emerged.....

 

[kristiang85]

The problem is that you can throw them in prison, but that would just cost the taxpayer even more money.

And still nothing can be done to recover it.

The government might as well have just made a huge bonfire of banknotes. It's disgraceful really - as you said, anybody with half a brain could see this coming.

 

[greyman42]

The problem is that you can throw them in prison, but that would just cost the taxpayer even more money.

And still nothing can be done to recover it.

The government might as well have just made a huge bonfire of banknotes. It's disgraceful really - as you said, anybody with half a brain could see this coming.

I think part of the problem was that when these loans were made available there was not enough time or resources to investigate the legitimacy of the applications. If the government had checked out every application, many legitimate companies would have gone under waiting for the money to come through.

 

[simonw]

I think part of the problem was that when these loans were made available there was not enough time or resources to investigate the legitimacy of the applications. If the government had checked out every application, many legitimate companies would have gone under waiting for the money to come through.

Not buying that. Doesn't take much time to check the basics on companies house.

 

[yorkie]

Those who supported lockdowns should be the ones footing the bill!

 

[greyman42]

Not buying that. Doesn't take much time to check the basics on companies house.

What is on companies house does not tell you that much regarding whether or not a loan is appropriate.

 

[Bayum]

Those who supported lockdowns should be the ones footing the bill!

Can’t see Boris et al allowing any of that from their personal coffers.

 

[greyman42]

Those who supported lockdowns should be the ones footing the bill!

These people are keeping a pretty low profile now.

 

[simonw]

What is on companies house does not tell you that much regarding whether or not a loan is appropriate.

It tells you an awful lot, if you know what you are looking for in terms of potential fraud.

 

[bramling]

Those who supported lockdowns should be the ones footing the bill!

Yes it was all allowed to drag on far too long, with too little attention paid to getting businesses back open as soon as possible. Too easy to keep the tap flowing without giving any thought to the consequences. I bet this is the thin end of a very thick wedge too.

(Some) people have been living a lie over the last 1-2 years. A lot of the damage is already now done, however we certainly should be endeavouring to make life merry hell for those who still want to cling on to Covid, otherwise we are never going to get past this roadblock.

 

[Bishopstone]

Remember that, at the time, the opposition lines were:

i) The processes are too slow/too much ’red tape’ - ‘get the money out of the door!’
ii) The schemes weren’t generous enough (!)

So I’ve not got much sympathy for the crocodile tears around fraud, two years later.

Very many fraudulent applications could have been stopped if each was subject to human review and some moderate due diligence. However, human review would have added delay (not politically tolerable - see above!), exacerbated by the fact that the reviewers - junior managerial staff in banks, largely - were home schooling etc like everybody else, in April 2020, and still had their regular work to complete! So the smaller (Bounce Back) loans were self-certified by borrowers, mostly.

From the numbers I’ve seen, I’m surprised the loss estimates aren’t larger, frankly. There are a great many honest business people out there, paying back debt that was only needed because they were forced to close.

 

[bramling]

Remember that, at the time, the opposition lines were:

i) The processes are too slow/too much ’red tape’ - ‘get the money out of the door!’
ii) The schemes weren’t generous enough (!)

So I’ve not got much sympathy for the crocodile tears around fraud, two years later.

Very many fraudulent applications could have been stopped if each was subject to human review and some moderate due diligence. However, human review would have added delay (not politically tolerable - see above!), exacerbated by the fact that the reviewers - junior managerial staff in banks, largely - were home schooling etc like everybody else, in April 2020, and still had their regular work to complete! So the smaller (Bounce Back) loans were self-certified by borrowers, mostly.

From the numbers I’ve seen, I’m surprised the loss estimates aren’t larger, frankly. There are a great many honest business people out there, paying back debt that was only needed because they were forced to close.

I’m sure there were plenty of dubious practices in relation to furlough too. I know one who was on furlough from start to finish of the scheme, who then promptly retired.

The best way to have avoided this would have been at root, keep as many businesses functioning and as many people in their normal work as possible. The government didn’t seem to care about this, and for their part elements of the population were too busy enjoying their freeby days at the beach to consider the consequences.

We seemed to go from “National emergency” in March 2020, to these measures being “de-facto business as usual” for a further year and a half, including for some time after the vulnerable had all been offered their vaccines. That was pretty remiss, and (in my view) because Johnson was too weak to make strong decisions, and Sunak was too busy building up a brand image to lay the foundations for a future leadership bid. It seems pretty clear neither one of this pair really believed in what they were advocating and imposing.

 

[Simon11]

Unfortunately, it isn’t the only covid scheme that has led to money being wasted.

For small charities who own land and pay business rates (which is actually £0 for charities), they have done surprising well with covid and received around £20k in grants over the period, including £2.4k for Omicron over this winter.

Our group has spent the money on replacing the electrics and the roof, which I am sure lots of community halls/ groups will be doing over the next few years! We had more income during covid than pre covid and were only halted from running our meetings for one term.

The challenges with offering a simple
Scheme and having a standard form, I guess…!

At least most decent charities have a paper trail with funds going towards their charity goals.

 

[Jonny]

The problem is that you can throw them in prison, but that would just cost the taxpayer even more money.

And still nothing can be done to recover it.

The government might as well have just made a huge bonfire of banknotes. It's disgraceful really - as you said, anybody with half a brain could see this coming.

Well, if they've spent it on something with resale value, that can be seized sold to repay (some of) the debt.

 

[TPO]

Those who supported lockdowns should be the ones footing the bill!

Absolutely! Particularly those who were so worried about contact that they held parties in Downing Street.

I’m sure there were plenty of dubious practices in relation to furlough too. I know one who was on furlough from start to finish of the scheme, who then promptly retired.

The best way to have avoided this would have been at root, keep as many businesses functioning and as many people in their normal work as possible. The government didn’t seem to care about this, and for their part elements of the population were too busy enjoying their freeby days at the beach to consider the consequences.

We seemed to go from “National emergency” in March 2020, to these measures being “de-facto business as usual” for a further year and a half, including for some time after the vulnerable had all been offered their vaccines. That was pretty remiss, and (in my view) because Johnson was too weak to make strong decisions, and Sunak was too busy building up a brand image to lay the foundations for a future leadership bid. It seems pretty clear neither one of this pair really believed in what they were advocating and imposing.

I agree that the best thing would have been to keep businesses open. But far too many people liked being on furlough.

Strange tho isn't it how quickly small self-employed contractors and micro-business/new businesses got/kept going where larger businesses didn't.

I am just thankful that the Spectator asked some proper questions before Christmas 2021 and blew the lid of the scam (as scam it was) of yet another call for lockdown.

Perhaps we should have had a conversation about home working vs furlough earlier. I suspect if home working (without COVID) were more widely available and govt money less available, furlough return would have been much more rapid.

TPO