Bounce Back Loan CIFAS Marker Successfully Removed
KANGS has successfully helped a business and company directors secure the removal of a CIFAS marker that had been wrongly registered following issues connected to a bounce back loan.
The Credit Industry Fraud Avoidance Scheme, known as CIFAS, maintains comprehensive databases, including one for individuals potentially considered as a risk for committing fraud or money laundering, against whom a marker, may be registered.
At present, HMRC and lenders have faced sustained pressure to recover taxpayer money provided to support businesses throughout the Covid 19 Pandemic, including those provided under the Bounce Back Loan Scheme. As a result, lenders are often required to investigate cases where misuse or fraud is suspected and recover funds.
The ramification of this is that lenders are regularly closing bank accounts, often without notice, and applying to CIFAS for the issue of markers, where the same are not justifiable. This pressurised environment has also led to legitimate businesses being caught up in investigations and enforcement action, sometimes resulting in severe and disproportionate consequences.
The consequences of being subjected to a marker can be financially devastating.
In this case, our client first became aware of the damaging marker when he sought to arrange further funding that was essential to the operation and growth of his property development business.
He chose to engage our services after learning about our experience in CIFAS related disputes and our regular work supporting businesses with the removal of CIFAS markers.
Nazaqat Maqsoom of KANGS explains the work conducted to achieve this highly satisfactory result.
The Circumstances
During the COVID-19 Pandemic, our client obtained a Bounce Back Loan of fifty thousand pounds, through one of his companies from Lloyds Bank PLC (‘the Bank’), which was necessary for the operation of his business.
The loan was fully repaid in 2023.
As the result of a subsequent investigations, the Bank alleged that, not only was our client’s company not entitled to the loan but the funds received had not been utilised for the stipulated business purposes. CIFAS markers were applied against our client personally and against his company.
Our client strongly objected to the allegations and whilst the Bank conceded that the company was entitled to receive the loan, it continued to maintain that the funds had not been utilised for business purposes and refused to withdraw the markers.
KANGS was instructed to engage with the Bank for the purposes of settling the dispute and securing the removal of the CIFAS markers.
How We Assisted Our Client
Having met with our client and discussed and advised upon their position, we furnished the Bank with a comprehensive explanation of all the circumstances. This was supported by contemporaneous evidence, pertinent documentation, and an explanation of the relevant law, in an effort to secure the removal of the markers.
Before CIFAS and the applying financial institution can issue a marker they must ensure, amongst other criteria that:
- there are reasonable grounds to believe that a fraud or financial crime has been committed,
- the evidence must be clear, relevant and rigorous.
Unfortunately, despite the explanation of these legal requirements, whilst the Bank agreed to remove the markers from the CIFAS database, it insisted on inserting ‘data entries’ which stated that our client and his affiliated companies were connected to ‘fraudulent conduct.’ The data entries therefore served the same function as markers in all but name.
Clearly, the Bank’s position was totally untenable and the team at KANGS commenced preparations for the issue of formal proceedings in order to bring the issue before a civil court, which included identifying an appropriately experienced barrister to present our client’s contentions to the court.
The Successful Outcome
As the result of the increasing pressure created by the prospect of an action before a civil court, the Bank conceded its position and removed the markers and the data entries.
Our client was delighted with the highly successful outcome achieved by the team at KANGS. The presence of the markers had caused significant stress and anxiety for him and his family, but also a detrimental impact for his businesses, which depended on access to financial lending facilities.
Until the markers were removed, our client was unable to operate his business effectively. Their removal has allowed him to move forward with confidence, both personally and professionally.
How Can We Help You?
The impact of Bounce Back Loans will be felt for some time, given the significant levels of outstanding debt. Other innocent individuals and businesses are likely to be subjected to the problems created by CIFAS markers.
If you are worried about an existing Bounce Back Loan that you or your business has received, then it would be wise to seek immediate experienced professional advice. There are proactive steps that may be available to you in order to mitigate your position.
KANGS regularly takes instructions in relation to the removal of CIFAS markers. KANGS has vast experience in dealing with such legal matters and a history of successful outcomes. If you receive a CIFAS marker, contact our solicitors who will be able to discuss your matter and provide the appropriate guidance.
Please feel free to contact our team using the details below as they will be delighted to hear from you.
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
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