Bounce Back Loan Fraud
The ‘Bounce Back Loan Scheme’ was created in an endeavour to assist businesses facing losses in revenue and reduced cashflow as a result of the severe downturn in trade arising from the COVID-19 pandemic.
It is reported that in excess of 1.17 million such loans have been granted since May 2020 and it is reported that there has been significant criminal exploitation of this scheme.
Timothy Thompson of Kangs Solicitors comments upon the position.
What is a Bounce Back Loan?
Bounce Back loans can be summarised as follows:
- They are state-backed
- They are available to businesses established prior to March 2020 seeking to borrow between £2,000 and £50,000
- Interest will not be charged and there are no repayments required for the first twelve
- There are no financial penalties charged for early repayment
- The loans are unsecured
Bounce Back Loan Frauds
The Chancellor has issued approximately £35 billion in bounce back loans to help circa. 830,000 businesses.
Following investigations conducted by government bodies, including the Police, it has been uncovered that there exists serious exploitation by individuals making fraudulent applications by for example, claiming through companies which have been set up for the purposes of multiple fraudulent applications.
It has been reported that ‘Government agencies have been very clear that deliberate cases of fraud can expect the full force of the law’.
Criminal Offences
The Fraud Act 2006 provides that a fraudulent application may, inter alia, lead to a charge of:
- Section 2 – Fraud by False Representation which states:
(1) A person is in breach of this section if he—
(a) dishonestly makes a false representation, and
(b) intends, by making the representation—
(i) to make a gain for himself or another, or
(ii) to cause loss to another or to expose another to a risk of loss.
(2) A representation is false if—
(a) it is untrue or misleading, and
(b) the person making it knows that it is, or might be, untrue or misleading
- Section 4 – Fraud by abuse of position which states:
(1) A person is in breach of this section if he—
(a) occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person,
(b) dishonestly abuses that position, and
(c) intends, by means of the abuse of that position—
(i) to make a gain for himself or another, or
(ii) to cause loss to another or to expose another to a risk of loss.
(2) A person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act.
Civil Consequences
It is likely that any business suspected of submitting any fraudulent loan application will be subjected to an Account Freezing Order which is a civil order restraining any bank account suspected of holding any funds arising from the proceeds of crime.
Please follow this link for more details on Account Freezing Orders.
How To Contact Us
We welcome new enquiries by telephone or email and, when necessary, our expert 24/7 Rapid Response Police Station Team is here to assist you on 0798 9521 210 should you require advice and assistance out of office hours.
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.
