Increased action from banks on those defaulting on Bounce Back Loan repayments
29th March 2022
Increased action from banks on those defaulting on Bounce Back Loan repayments
Banks are set to get tougher on those defaulting on repayments after more than £240m of 100% guarantees on Bounce Back Loans were removed by the government due to errors in initial vetting procedures.
Over 1.6 million Bounce Back Loans were issued to businesses. Against these, more than 7,400 guarantees have since been removed amid fears that suitable checks were not carried out and a higher level of fraudulently-obtained loans were issued than originally forecasted. Anti-fraud minister Lord Agnew resigned recently due to his worries over the lack of oversight of the scheme and a report from the National Audit Office in late 2021 found that measures to prevent fraud were not adequate.
It is expected that further removals will take place as lenders and The British Business Bank continue to find potential errors in vetting procedures. Some £4.9bn of loans is estimated to be at risk of fraud within the scheme, though new modelling work by Price Waterhouse Coopers shows it may be closer to £3.5bn.
