Barclays preys on Covid crooks for £ 1 billion

Barclays will hunt for Covid crooks for £ 1bn: Bank to send a group of fraudsters to repay loans – as taxpayers face huge losses

  • False borrowers may have taken about £ 5 billion in total from £ 47 billion issued by all banks
  • The Treasury guaranteed loan repayments so that banks would not be exposed to excessive risks
  • There are growing fears that a large number of these loans will never be repaid
  • Barclays needs official approval to hire an outside firm to hunt down scammers

Barclays Bank is preparing a group of fraudsters to repay up to £ 1bn of Covid loans that were pulled out by criminals.

At the height of the pandemic, this major lender gave small firms 345,006 loans worth £ 10.8 billion under a government loan repayment scheme.

They were fully guaranteed by the Treasury that banks were not exposed to excessive risks. However, this has left taxpayers on the hook for potentially huge losses from borrowers who are either fraudsters or really unable to pay.

Concerns: Barclays has issued 345,006 loans worth £ 10.8 billion to small firms as part of a government loan scheme in the midst of a pandemic

The Treasury has encouraged banks to loosen routine checks to ensure that financial aid can be distributed quickly to prevent deterioration of otherwise healthy firms during the blockade.

But there are growing fears that large amounts of these loans will never be repaid. It is estimated that the fictitious borrowers could get their hands on approximately £ 5 billion out of a total of £ 47 billion issued by all the banks involved in the scheme.

Barclays, which has consulted with the government about its plans to hire an outside firm to hunt down fraudsters, requires official approval for the move.

The name of the firm she plans to hire remains a shrouded mystery so as not to warn fraudsters that they have tails of investigators.

Its elite team will include experts in insolvency, law and forensic accounting. The hope is to reduce losses to taxpayers who are already paying additional contributions to National Insurance and have suffered from the freezing of allowances and thresholds.

Based on industry data, the amount of loans guaranteed by taxpayers, which were transferred to fraudsters through Barclays, is estimated at 1 billion pounds.

City sources told The Mail on Sunday that other banks are likely considering similar plans.

Many small companies that really needed money are now struggling to survive amid a cost of living crisis that could lead to further defaults.

The government’s own estimates suggest that taxpayers could face a black hole of £ 17 billion from fraud and the collapse of loan-related companies.

Barclays has held talks with the Cabinet Office over the transition to outsourcing the Covid fraud investigation. This is likely to be given the green light by ministers seeking to recoup as much loss as possible.

Lenders have to impose their own private armies of crime fighters due to lack of police resources, only 2 percent of which are directed at fraud.

Taxpayers will ultimately pay the bills because investigators will be paid a portion of the money they charge as a fee.

Under the proposals, which are still under discussion, Barclays will initiate insolvency proceedings against suspected criminals who took loans without intending to repay.

The liquidator, appointed by the State Insolvency Service, sells the right to recover debts to a third party who will hear the case in court.

The Cabinet hopes that specialized firms will be more successful in tracking large amounts than the banks themselves. It is believed that the pilot scheme will precede a wider deployment.

Repayment loans ranging from £ 2,000 to £ 50,000 were issued quickly with very small checks. The Treasury has been desperate for banks to get money for businesses struggling to prevent a wave of insolvency after the Covid strike.

But the haste proved controversial, and the government came under fire for failing to do more to make the scheme defensive against fraud.

A study by consulting firm Real Business Rescue found cases where company directors appear to have used Covid loans to buy Range Rovers, jet skis, rent out property, fly lessons and even subscribe to pornographic websites.

Finance Minister Lord Agny resigned earlier this year, saying the government had “little interest in the consequences of fraud for our society”.

He said ministers made “schoolboy mistakes” – including giving loans to more than 1,000 companies that did not trade when Covid was hit.

The State Audit Office also criticized the government for failing to stop criminals using loans.

Barclays declined to comment.

A government spokesman said: “Taxpayers expect the government to take vigorous action against those who have fraudulently obtained loans and do not repay them.”


Barclays preys on Covid crooks for £ 1 billion

Source link Barclays preys on Covid crooks for £ 1 billion

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