Treasury writes off £4.3BN in C19 Fraud

[Ozzy]

I remember watching John Glen speaking to the treasury select committee and they raised the issue of fraud as a concern, asking whether he was concerned about it with how easy BBL's were being dished out. He said at the time we'd need to accept a small amount of fraud would happen but the benefit outweighed the amount of fraud we'd see.
Got to say, they were very naive. £1 in every £4 to be recovered, thats basically 75% of the claims they expect to have been fraudulent.

Treasury writes off £4.3bn in Covid payments lost to fraud

The Treasury expects to recover only £1 of every £4 stolen from the public purse by fraudsters during the pandemic

bmmagazine.co.uk

My only hope is that the banks shoulder some of the responsibility where they are shown to have demonstrated an unacceptable lack of diligence, using BBL as part of their marketing for customer acquisition.

 

[Paul Norman]

Of course, this was entirely predictable.

And equally, of course, I would take all Treasury numbers with a pinch of salt.

However, we should , next time the government are hounding a disabled person for their PIP, stop to think how we, as a society, hold governments accountable.

This is an obscene lack of basic stewardship of public funds on a scale that makes your eyes bleed.

And recovering these kinds of money is not possible. Ever.

It sets the back drop to my basic belief that governments are rarely good at anything, and, perhaps, our fondness of public services, and putting more public funds into anything, is at best a bit quaint.

 

[MBE2017]

It always comes down to a simple fact, it is always easy to squander someone else’s money.

 

[Paul Norman]

It always comes down to a simple fact, it is always easy to squander someone else’s money.

True. And no one gets upset about governments giving money to people that don't need it. They only get upset when it goes to people who do. Like those struggling at the bottom end of the poverty trap.

 

[The Byre]

It always comes down to a simple fact, it is always easy to squander someone else’s money.

Then there's the £37bn syphoned off for the infamous 'Track-n-Trace' programme.

 

[Mark T Jones]

The industry joke at the time was that BBL was a 'grant with a repayment option'.

The stark reality is that the motives behind the scheme went well beyond simply helping small business - probably ultimately one component in staving off civil unrest.

I seldom find myself defending banks, but the reality here is that they really didn't want to participate in the BBL scheme - a huge amount of work, with a still unacceptable element of risk, with minimal return. There were carrots & there were sticks!

Possibly the biggest carrot was a legal exclusion which means they can't be accused of irresponsible lending.

One question I do have is why do you think it's preferable for the banks to charge losses back to their customers, than for Government to pass it back to the taxpayer?

 

[MBE2017]

One might think such outrageous waste is deliberate, much easier to hide unaccounted spending that way.

When self employed guys have had to account for every penny with receipts, our masters still can put in expenses with no receipts under a certain value, they have different covid rules, etc etc.

Reminds me of Animal Farm.

 

[Newchodge]

Hopefully this is ALL Covid-related fraud - SEISS, furlough etc as well?

 

[japancool]

Then there's the £37bn syphoned off for the infamous 'Track-n-Trace' programme.

Test & Trace, not Track & Trace. Track & Trace is Parcelforce's parcel tracking service.

Now, the money the government has to pay out to the sub-postmasters who were wrongly prosecuted by RM is whole other kettle of fish!

 

[Ozzy]

Hopefully this is ALL Covid-related fraud - SEISS, furlough etc as well?

Yes, the article at least breaks down how much of that is allocated to the different types of financial support that was offered.

 

[Ozzy]

One question I do have is why do you think it's preferable for the banks to charge losses back to their customers, than for Government to pass it back to the taxpayer?

As a general comment, personally I don't. My gripe about this, and I am very specifically only talking about the BBL's, is how easy it is to do some basic checks but they were not done. Like fraud involving newly registered companies with no trading history at all, and shelf companies purchased which were then used for BBL's. Simple checks at Companies House taking less then 2 minutes would have ruled these ones out.

 

[MBE2017]

As a general comment, personally I don't. My gripe about this, and I am very specifically only talking about the BBL's, is how easy it is to do some basic checks but they were not done. Like fraud involving newly registered companies with no trading history at all, and shelf companies purchased which were then used for BBL's. Simple checks at Companies House taking less then 2 minutes would have ruled these ones out.

Totally agree, this should have been a requirement for qualification, say trading for a minimum of three years etc. The Self Employed had to show they had been trading to qualify for the SEISS grants, many who had just started missed out, as did many on furlough where they had just changed jobs.

 

[Mark T Jones]

As a general comment, personally I don't. My gripe about this, and I am very specifically only talking about the BBL's, is how easy it is to do some basic checks but they were not done. Like fraud involving newly registered companies with no trading history at all, and shelf companies purchased which were then used for BBL's. Simple checks at Companies House taking less then 2 minutes would have ruled these ones out.

The lending professional in me would agree 100%

I learned early on that the only way to understand BBLwas to unlearn everything I know about responsible lending.

 

[Mr D]

Of course, this was entirely predictable.

And equally, of course, I would take all Treasury numbers with a pinch of salt.

However, we should , next time the government are hounding a disabled person for their PIP, stop to think how we, as a society, hold governments accountable.

This is an obscene lack of basic stewardship of public funds on a scale that makes your eyes bleed.

And recovering these kinds of money is not possible. Ever.

It sets the back drop to my basic belief that governments are rarely good at anything, and, perhaps, our fondness of public services, and putting more public funds into anything, is at best a bit quaint.

We'd have been rather messed over if the government hadn't chucked a load of money around when they did.
The downside of that was always going to be increased fraud.

 

[Mr D]

Totally agree, this should have been a requirement for qualification, say trading for a minimum of three years etc. The Self Employed had to show they had been trading to qualify for the SEISS grants, many who had just started missed out, as did many on furlough where they had just changed jobs.

And would have cost some businesses such they'd go under.

Yes, could have been done. We'd have moaned if they did.

 

[Paul Norman]

We'd have been rather messed over if the government hadn't chucked a load of money around when they did.
The downside of that was always going to be increased fraud.

I agree.

I just wonder how much of it could have been chucked around in a slightly more focused way.

If the billions that went to fraudsters went to businesses, for example. Or - and this is possible - was this not so much fraud as just very high risk lending, in which case, I refer the good people to your valid comment.

 

[japancool]

Totally agree, this should have been a requirement for qualification, say trading for a minimum of three years etc.

It was a requirement, but it seems many banks didn't check to confirm the declaration was true.

 

[Mark T Jones]

It was a requirement, but it seems many banks didn't check to confirm the declaration was true.

They only had to be established before Mar 20.

 

[japancool]

They only had to be established before Mar 20.

2019, I thought. But some banks didn't even check that.

 

[Mark T Jones]

2019, I thought. But some banks didn't even check that.

FAQs: Bounce Back Loan Terms - British Business Bank

See the FAQs about bounce back loans repayment terms. Learn more about the Bounce Back Loan Scheme, bounce back loan terms and bounce back loan repayment terms.

www.british-business-bank.co.uk

They will definitely have checked, but 'established' can be a broad term.

 

[MBE2017]

And would have cost some businesses such they'd go under.

Yes, could have been done. We'd have moaned if they did.

Like those self employed and new starters moaned, but still received nothing?

 

[Newchodge]

2019, I thought. But some banks didn't even check that.

No, established by March 20, not in financial difficulties in Dec (?) 19. Of course if you don't start trading until January 20 you meet these criteria.

 

[Mark T Jones]

Like those self employed and new starters moaned, but still received nothing?

QED

Nothing they did was going to be right. People would always moan, so they got on and did something

Which I respect

 

[japancool]

Self employed did get something, they got the SEIS grant.

 

[thetiger2015]

Self employed did get something, they got the SEIS grant.

No. You had to pass certain eligibility criteria.

If you were a sole director, you were pretty screwed. Your staff could be furloughed but, if you wanted to furlough yourself, you would have to be on payroll and you could only claim for the payroll part and you were not able to do anything with your business, you could only carry out duties that were legally required e.g. replying to court papers in a timely manner or filing accounts/tax returns. Nothing else could be done - your company would still have expenses though? Rent? Utilities? But no income and no wages for yourself.

If you were a self employed builder, non director, you could claim SEIS relatively easily but then you'd have to down tools completely and hope you didn't lose all your customers.

It was self employed directors of new companies that were hardest hit. If they were law abiding citizens. They were unable to prove earnings through PAYE, hence they could not claim anything.

The bloke in the office next to ours fell in that trap. New business, less than 3 months trading, no pay slips yet. Couldn't claim a bean.

 

[japancool]

It was self employed directors of new companies that were hardest hit. If they were law abiding citizens. They were unable to prove earnings through PAYE, hence they could not claim anything.

No doubt, but that wasn't what I was responding to.

 

[Mr D]

No. You had to pass certain eligibility criteria.

If you were a sole director, you were pretty screwed. Your staff could be furloughed but, if you wanted to furlough yourself, you would have to be on payroll and you could only claim for the payroll part and you were not able to do anything with your business, you could only carry out duties that were legally required e.g. replying to court papers in a timely manner or filing accounts/tax returns. Nothing else could be done - your company would still have expenses though? Rent? Utilities? But no income and no wages for yourself.

If you were a self employed builder, non director, you could claim SEIS relatively easily but then you'd have to down tools completely and hope you didn't lose all your customers.

It was self employed directors of new companies that were hardest hit. If they were law abiding citizens. They were unable to prove earnings through PAYE, hence they could not claim anything.

The bloke in the office next to ours fell in that trap. New business, less than 3 months trading, no pay slips yet. Couldn't claim a bean.

And many of the self employed could get the grant plus work too.