Illuminati Press
Top trending news in digital world is now here

Trust in UK ‘damaged by failure to prevent Covid loans fraud’ | UK news


The failure to name which companies received state-backed loans totalling £80bn during the Covid pandemic has put the UK’s reputation as a trusted place to do business at risk, a tribunal has heard.

The warnings by anti-corruption campaigners and a leading fraud expert were made on the first day of a three-day tribunal challenging the state-owned British Business Bank (BBB) and the information commissioner over their decision to keep the names of loan recipients under wraps.

The hearing was prompted by concerns over the misuse of public funds by fraudsters and organised criminals. Campaigners including Spotlight on Corruption, which brought the case to tribunal, claim this fraud could have been prevented in part through greater transparency.

However, the BBB has argued that releasing those names would breach commercial confidentiality between borrowers and the private lenders who distributed the funds, and put borrowers at risk of becoming fraud targets themselves.

David Clarke, a leading fraud expert and former chair of the Fraud Advisory Panel charity, told the tribunal on Monday that money would have been saved and fraudsters deterred had the BBB (which had oversight of the scheme) made it clear it intended to publish the names of recipients when private lenders first started distributing loans.

“The level of due diligence controls put in place … were woefully inadequate and could have been prevented and protected partly by the sharing of the names of those companies,” Clarke said. “Saying you’re going to publish is a great way to first deter [fraudsters] … That’s what I was saying back at the start of the pandemic and it just seems to be ignored.”

He suggested that publishing the information now would give credit agencies and journalists access to a swathe of data that would help under-resourced public bodies identify potential fraud, and ensure there was public confidence in the UK as a place to do business.

“Is it right to let that out to the world? If we want trade to continue, and be able to have trust in the system then yes, we must publish data of businesses [who received loans],” Clarke said.

The business department’s latest estimates suggest taxpayers could be forced to cover £3.3bn, or 4.2% of the £80bn-worth of loans distributed, due to fraud and error. Others fear the sums could be much higher.

The bulk of those losses are likely to stem from the popular bounce back loan scheme, which had fewer checks in order to ensure funds were distributed to businesses at speed. The scheme handed out £47bn, with affected business applicants able to borrow up to £50,000 each. The government is liable for 100% of the losses if borrowers fail to repay.

Representatives of Spotlight on Corruption argued that the privacy terms attached to the loans, as a result of their affiliation to the BBB, meant borrowers should have expected their information might be publicly disclosed.

But Richard Bearman, the BBB’s director in charge of the bounce back loan scheme, said disclosing the information would actually raise privacy concerns and erode trust between businesses and their commercial banks, as well as with government bodies.

“These are small businesses in a moment of absolute crisis worrying about their future … Did they foresee potential outcomes like this at that time? I very much doubt it,” Bearman said. “At the heart of it, there is a question of trust. And trust between … us and or government, and with lenders and their customers.”

The tribunal continues.

Source link

Leave A Reply

Your email address will not be published.