Bounce back loan
- Thread starter OMGVape
- Start date
That's a question for your MP I think. At the end of the day if the banks are acting in line with the agreements they have signed up for (and I've seen no evidence they're not) then the scheme is arguably too loosely defined and someone's dropped a ball and allowed the banks to get away with murder (again). If they are breaking the terms of what they've agreed with the British Business Bank then they should be taken to task.
If you were being really cynical, a lot of these businesses were probably either marginal or actually basket cases before this crisis and this is just that one event that was needed to push them over. To some extent this will be an enforced cull of the weakest. There is an argument for letting some of them fail (unpleasant though that might come across).
There almost certainly isn't enough money committed to the BBLS scheme by the banks subscribed to cover all the losses in the economy since the start of this, and certainly not to keep businesses that are going to continue to be badly affected for a long time going without those businesses undergoing significant change.
It's going to be bumpy out there for a while...
Upvote
0
Their twitter feed seems awash with some very angry folk because of how they've been stopping and starting their queuing system, though if it means that those whose applications get in are dealt with promptly then it is perhaps the lesser of two evils. I got in the queue last night somehow (even though it was supposedly shut... I guess that is another bug in their system...!).
Upvote
0
Most lenders (at present) require you to be already using them as the main bank for your business. That may change of course.
There is no central database they use to check you're not committing fraud but I think it would take HRMC 5 seconds to detect that when they start looking into it all after the fact.
What the lenders check for now and what the government starts checking for when things have calmed down are completely different. You wont have much defence when knowingly committing fraud.
Upvote
0
Well, at the most basic level, the agreement you sign forbids you from doing this. So you'd hope for most people their moral compass would be the first thing to stop them...
At the "how you're going to get caught" level, the 1st years interest is paid to the bank by the British Bank (UK GOV PLC) physically, but it is actually paid to the loan taker on paper. The British Bank receive details of all loan takers, and seeing as UTR / VAT and Companies Registration numbers are being taken at application time, they're very quickly going to have a list of folk who have "double dipped", whether blatantly or through companies which are grouped.
I really have to ask where the question is going. There's never been anything stopping anyone applying to a hundred banks for a hundred different loans and then doing a Lucan, this isn't anything new. The difference here is you're going to have UK Gov after you as well as private banks, and while you might think you don't have your house on the line because you didn't have to give security, rest assured they've got your balls in a vice if they want them. Not a smart move IMHO...
Upvote
0
I like to think of it as being a kind of natural selection for would be financial crime "geniuses".
If they can't find more imaginative ways to go about this sort of thing than giving their name and details to the federales for validation, then they're going to get everything they have coming to them...!
If they can't find more imaginative ways to go about this sort of thing than giving their name and details to the federales for validation, then they're going to get everything they have coming to them...!
Upvote
0
Well, if I took the example of Metrobank, you have to have a business account with them (that is opened in branch), give them some details and go through the application process, that then sends you a text to the phone number previously registered with them, and then pays the money into the account that they'd already verified.
When I set up a Starling account recently they needed quite a bit of ID. Admittedly provided electronically over their app, but still not easy, and then you'd have to look at just how successful folk are being at getting loans with accounts they've just opened.
At the end of the day if you've got the balls for serious financial crime (which is what you're suggesting here) then you don't need a scheme like this to be doing it...! And that is what I'm saying. The opportunists who see this as being their route to free money are going to come unstuck. Any grifters who are good at their "trade" are likely making enough in other places not to even bother with this...
When I set up a Starling account recently they needed quite a bit of ID. Admittedly provided electronically over their app, but still not easy, and then you'd have to look at just how successful folk are being at getting loans with accounts they've just opened.
At the end of the day if you've got the balls for serious financial crime (which is what you're suggesting here) then you don't need a scheme like this to be doing it...! And that is what I'm saying. The opportunists who see this as being their route to free money are going to come unstuck. Any grifters who are good at their "trade" are likely making enough in other places not to even bother with this...
Upvote
0
You can't give some innocent company details to the bank though, as it wouldn't match your bank details.
Self-employed have to give their UTR. Again, if you provided fake or another persons UTR, they're not going to match the bank details.
The above would require you to go one step further by opening bank accounts under fake ID etc; which is a whole different level of fraud. It would be bad enough getting caught getting multiple loans, let alone getting charged for identity theft.
That's getting into pretty high level fraud at that point.
Upvote
0
You can't give some innocent business details to the bank. Someone else could.
You haven't quite grasped this concept of fraud have you?
High level fraud is many millions of pounds. Low level fraud is what is being talked about.
And judging by the media reports, low level fraud appears to be common enough.
Upvote
0
Because you can sign up for multiple BBL and you have to self-certify that you're not in the process with another lender.
They clearly don't have access to a central database to check who has one or not.
If they did, it would be a bit strange for them to easily spot BBL fraud and allow it to happen to themselves.
Upvote
0
Not sure what you mean? Unless I'm mis-reading what you're saying.
The data is linked, so it doesn't matter who gives it to the bank. If the bank details don't match the BBL details, it's not going to work.
Opening bank accounts using fake details, to apply for fraudulent loans isn't really low level fraud is it. That's a bit higher up the ladder.
Upvote
0
I'm not going to give a step by step guide to how to defraud the banks over this loan.
If you can't figure it out then good for you.
£100 cost to open a bank account using fake details in order to get considerable sums? That is low level.
Upvote
0
If you can't read what is said then there's no discussion to be had on the first thing.
Guessing; yes. Based on logical thoughts.
If they do have access to a central database, it would be very strange of them to then actively allow fraud. You honestly think that if a lender has access to a database, they would purposefully allow fraud they can spot in seconds?
Upvote
0
Follow up to myself here; from application to funds in account in 24 hrs, with a total of 15 minutes actual effort filling in the webform. Pretty good effort from Metrobank in my case, though looking at their Twitter feed a lot sound like they're not having as much luck...
Upvote
0
Allow fraud they can spot in seconds?
You mean like everywhere else that allows fraud and can spot in seconds?
The point is that there is no fraud until someone tries it - then action can be taken against them. You ever hear of fraud being committed? Look online, google will help you there.
And I can read what is said. If you mean something other than what you said then how are others supposed to know?????
Upvote
0
Busy working, Now replying.
Banks have got a taxpayer bailout in 2008. So it looks like now Goverment is looking at them to repay a favor.
As to funds. Banks can borrow from Bank of England. Correct me if I am wrong.
As to specifically legislating that banks must lend to anyone who fits the criteria. How can it be done?
Banks are private entities. Unless the agreement they have signed includes some clause that allow Gov to ask bank to start lending to every scheme requirements meeting entity.
Low credit score, not banking with a bank even CCJ are all ok under a BBL scheme.
Banks have got a taxpayer bailout in 2008. So it looks like now Goverment is looking at them to repay a favor.
As to funds. Banks can borrow from Bank of England. Correct me if I am wrong.
As to specifically legislating that banks must lend to anyone who fits the criteria. How can it be done?
Banks are private entities. Unless the agreement they have signed includes some clause that allow Gov to ask bank to start lending to every scheme requirements meeting entity.
Low credit score, not banking with a bank even CCJ are all ok under a BBL scheme.
Upvote
0
Even though they're OK with the BBLS scheme, it doesn't mean the bank whats your business, nor does the BBLS put them under any obligation to take it, and the criteria they use for that is completely down to them. The most obvious indication of the balance of power in this is that the banks are free to decide to only lend to their customers (though some banks have decided they don't want to limit themselves in this way), and the information in the British bank guidance that just says you should find another bank if the one you apply to says no.
The only folk to gripe to are the British Bank and the Govt.
Upvote
0
How would government legislate to ensure banks will lend to every eligible case?
The very fact that scheme is a 100% gov backed is a poke to lend lend lend.
Plus some stuff that goes behind the curtains of which we know little.
In past BOE also provided extra funds to banks directly for them to lend to SMEs.
Current chairman is encouraging banks to get a grip and lend.
It could be simply this - it will take a bit of time maybe 2 more weeks for some people to adjust to new reality of lending.
Feel free to comment.
The very fact that scheme is a 100% gov backed is a poke to lend lend lend.
Plus some stuff that goes behind the curtains of which we know little.
In past BOE also provided extra funds to banks directly for them to lend to SMEs.
Current chairman is encouraging banks to get a grip and lend.
It could be simply this - it will take a bit of time maybe 2 more weeks for some people to adjust to new reality of lending.
Feel free to comment.
Upvote
0
2 weeks? It's been going for over a month already. I'm not sure there is much sign of a significant change to this particular scheme.
I think simply they've not made the scheme attractive enough for the banks to want to offer it, they're only being forced to do it by the court of public opinion. That's the reason everyone and their dog isn't signing up to be accredited; it's just the ones big enough that the amount of noise on their social media makes the execs take notice.
Maybe the recently published news about just how vertical the contraction in the economy in April was will spur on something new.
To be honest though I have some sympathy with the banks. Most of the bleating from folk seems to be coming from persons who from the sounds of it ordinarily I likely wouldn't lend a bag of sugar to, using personal accounts for business use against terms, I just started a £200K business a week before lockdown, etc.
They're damned if they do and damned if they don't because even with the undertaking that folk taking the loans have to make that they understand this is an unregulated product and that they are self certifying affordability, in 2 years time we're not going to hear the end of the hard done by who were forced into taking unaffordable debt...[/QUOTE]
I think simply they've not made the scheme attractive enough for the banks to want to offer it, they're only being forced to do it by the court of public opinion. That's the reason everyone and their dog isn't signing up to be accredited; it's just the ones big enough that the amount of noise on their social media makes the execs take notice.
Maybe the recently published news about just how vertical the contraction in the economy in April was will spur on something new.
To be honest though I have some sympathy with the banks. Most of the bleating from folk seems to be coming from persons who from the sounds of it ordinarily I likely wouldn't lend a bag of sugar to, using personal accounts for business use against terms, I just started a £200K business a week before lockdown, etc.
They're damned if they do and damned if they don't because even with the undertaking that folk taking the loans have to make that they understand this is an unregulated product and that they are self certifying affordability, in 2 years time we're not going to hear the end of the hard done by who were forced into taking unaffordable debt...[/QUOTE]
Upvote
0
The Business Bounce Scheme rules say self-certified. KYC AML and fraud check that is it. Those checks are done during an account opening. If account is open, company exist and self certifies money in theory should be given.
Could government on top legislate that banks must accept 100% of the applications? It is tricky legally to do so.
All the rest such as I think (insert your opinion) is an opinion. Banks were helped and now Government expects them to play along.
Government could borrow and then appoint banks as administrators of the scheme but that would make an expensive scheme even more expensive.
Government is underwriting scheme 100%, has suspected relevant sections of legislation. Yes there is a cost to administer those loans and a cost to chase some of them before been eligible to get a guarantee payment.
Yet it is in many cases simply a mentality (a changing one) of an old style underwriting.
Could government on top legislate that banks must accept 100% of the applications? It is tricky legally to do so.
All the rest such as I think (insert your opinion) is an opinion. Banks were helped and now Government expects them to play along.
Government could borrow and then appoint banks as administrators of the scheme but that would make an expensive scheme even more expensive.
Government is underwriting scheme 100%, has suspected relevant sections of legislation. Yes there is a cost to administer those loans and a cost to chase some of them before been eligible to get a guarantee payment.
Yet it is in many cases simply a mentality (a changing one) of an old style underwriting.
Upvote
0
It's impossible for any of us plebs to make a much informed opinion. There is a lot about the arrangements between the banks that isn't public, only being in the legal agreement the banks sign up for which is held confidential. I'm sure there is a long list of stuff behind simple statements such as this from the pre-agreement information that can be downloaded from the BB:
"Decision-making on borrower eligibility is devolved to the Lender, subject to a standard of care which will be set out in the legal agreement with BBB.".
and
"Lenders undergo periodic audits (including an audit prior to moving from a probationary to a full Lender under the Scheme). Samples of transactions will be analysed during the audit to check that Scheme eligibility rules and processes have been followed."
What is that standard of care? I wouldn't be suprised if it expects the banks to exercise some level of judgement in their lending. If it is fully self certified with only KYC AMD and fraud check - then what scheme eligibility rules are the BB checking have been followed?
Your own "Banks were helped and now Govt expects them to play along" is equally just opinion, just not prefaced with "I think"...
. Most of the UK majors chose not to receive a bailout. I'm not sure the likes of HSBC or Barclays feel they owe the Govt anything.
"Decision-making on borrower eligibility is devolved to the Lender, subject to a standard of care which will be set out in the legal agreement with BBB.".
and
"Lenders undergo periodic audits (including an audit prior to moving from a probationary to a full Lender under the Scheme). Samples of transactions will be analysed during the audit to check that Scheme eligibility rules and processes have been followed."
What is that standard of care? I wouldn't be suprised if it expects the banks to exercise some level of judgement in their lending. If it is fully self certified with only KYC AMD and fraud check - then what scheme eligibility rules are the BB checking have been followed?
Your own "Banks were helped and now Govt expects them to play along" is equally just opinion, just not prefaced with "I think"...
. Most of the UK majors chose not to receive a bailout. I'm not sure the likes of HSBC or Barclays feel they owe the Govt anything.
Upvote
0
It's impossible for any of us plebs to make a much informed opinion. There is a lot about the arrangements between the banks that isn't public, only being in the legal agreement the banks sign up for which is held confidential. I'm sure there is a long list of stuff behind simple statements such as this from the pre-agreement information that can be downloaded from the BB:
"Decision-making on borrower eligibility is devolved to the Lender, subject to a standard of care which will be set out in the legal agreement with BBB.".
and
"Lenders undergo periodic audits (including an audit prior to moving from a probationary to a full Lender under the Scheme). Samples of transactions will be analysed during the audit to check that Scheme eligibility rules and processes have been followed."
What is that standard of care? I wouldn't be suprised if it expects the banks to exercise some level of judgement in their lending. If it is fully self certified with only KYC AMD and fraud check - then what scheme eligibility rules are the BB checking have been followed?
Your own "Banks were helped and now Govt expects them to play along" is equally just opinion, just not prefaced with "I think"...
As I recall Barclays famously didn't have government help. From UK government anyway....
Seriously, the banks that did have help paid for it, quite a sum as I recall though been some years since saw it in banks accounts or annual Budget.
And like any of us hit with extra costs, simplest way of paying for it is get customers to pay extra.
That's you and me.
Upvote
0
Latest Articles
-
Andy Burnham's Manifesto for Small Business, and How It Stacks Up Against Count BinfaceIf all goes to plan (or rather, to Labour's timetable), Andy Burnham...- Ozzy
- Updated:
-
SEO in the Age of AI: What UK Small Businesses Actually Need to KnowTL;DR Search has shifted from "ten blue links" to answer engines, and...
- Ozzy
- Updated:
-
What Carphone Warehouse, Microsoft and Uber Have in Common: They Started in a DownturnThere's a comforting myth that you need a booming economy to start...
- Ozzy
- Updated:
-
What Makes a Small Business Actually Sellable?There's a question that a lot of small business owners never think to...
- Ozzy
- Updated:
-
Why Your Team Keeps Asking the Same Questions (And What to Actually Do About It)Every small business owner knows the moment. You're halfway through...
- Ozzy
- Updated: