PAC finds over £1 billion worth of fraudulent Bounce Back loan applications
09 Nov 2020
The Public Accounts Committee (PAC) identified more than £1 billion worth of fraud in the government's coronavirus (COVID-19) Bounce Back Loan Scheme (BBLS) during the first six months of the scheme being in operation.
In a letter to the PAC, which has been looking at the operation of the BBLS, Catherine Lewis La Torre, CEO of the British Business Bank, provided fraud statistics across all BBLS lenders, as of 20 October.
These statistics show 26,933 fraudulent loan applications have been detected, with a value of £1.1 billion.
The scheme was announced on 27 April to quickly provide loans of up to £50,000, or a maximum of 25% of annual turnover, to registered and unregistered small businesses in order to support them financially during the pandemic.
Preliminary estimates from the Department for Business, Energy and Industrial Strategy (BEIS) and the British Business Bank suggested that because of credit and fraud risks, 35% to 60% of borrowers may default on the loans.
Analysis by the National Audit Office (NAO) revealed that, assuming the scheme lends £43 billion, this would imply a potential cost to government of £15 billion to £26 billion.