The British Business Bank has warned of ‘significant fraud risks’ with coronavirus (COVID-19) business loans.
The Bank recently published a letter to the Secretary of State for Business, Energy and Industrial Strategy, Alok Sharma, outlining concerns in regard to fraud and the COVID-19 Bounce Back Loan Scheme (BBLS). The BBLS enables small and medium-sized businesses affected by COVID-19 to access finance more quickly.
The British Business Bank previously warned ministers that COVID-19 business loans could be subject to fraud.
Commenting on the issue, Keith Morgan, CEO of the British Business Bank, said: ‘The scheme is vulnerable to abuse by individuals and by participants in organised crime.
‘Alongside the fraud risk, there will be considerable credit risk in the current economic environment, which will be exacerbated by removing significant elements of the credit checks that would otherwise have been undertaken.’
A government spokesperson stated: ‘We’ve looked to minimise fraud, with lenders implementing a range of protections including anti-money laundering and customer checks, as well as transaction monitoring controls.
‘Any fraudulent applications can be criminally prosecuted, for which penalties include imprisonment or a fine, or both.’