JustUs boss says fintechs could have prevented huge amount of BBLS fraud
JustUs chief executive Lee Birkett has said that the government could have prevented a substantial amount of bounce back loan fraud by using fintechs to deploy the scheme.
He said that fintechs, including peer-to-peer lending platforms, would have delivered the bounce back loan scheme (BBLS) better by conducting faster, more accurate checks.
“Fintechs were the perfect vehicle for fraud prevention,” he said. “Every borrower, every director would have been checked.
“Tools were available, it’s just with archaic banks it didn’t happen. A large percentage of the fraud would have been because of the decisions made by government on who should distribute the BBLS.
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“It was absolutely staggering. If they’d have done what we requested to get money from efficient platforms, fraud checks would have been done automatically. We have the technology to do that, the banks didn’t.”
His comments come after Lord Agnew of Oulton, who stepped down as Treasury and Cabinet Office minister in January, told a Treasury select committee of MPs in March that quick checks could and should have been implemented at the time to reduce the possibility of Covid loan fraud.
Read more: Lord Agnew calls for British Business Bank resignations over Covid loan fraud
The BBLS was introduced in May 2020 to help microbusinesses impacted by the pandemic. The government underwrote the full value of the loans – which were up to £50,000 – in order to encourage lenders to deliver money to struggling firms as quickly as possible.
However, this meant the scheme was more susceptible to fraud than its larger counterparts, where lenders had to take on some of the risk.
During the pandemic, JustUs launched its own small business interruption loan services (SBILS) to provide funding for businesses that missed out on finance under the government’s Covid loan schemes.
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