reviewed-by
Reviewed by
Chris Andersen
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Reviewed by Chris Andersen

Chris became an Insolvency Practitioner in 2014 and is currently regulated by the IPA.

He is experienced in contentious insolvency with excellent analytical skills and strong knowledge of both general and technical insolvency matters.

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28th November 2022

With £46 billion loaned out to British taxpayers by the government, the subject of bounce back loan fraud has been much discussed. Figures remain approximate at best but if we take Cabinet Office data for generalised fraud across the public sector, we could estimate that at least £2.3billion of bounce back loans would classify as fraudulent.

The British Business Bank, who administered the scheme, have reported over 43.000 cases of prevented Bounce Back fraud, totalling just under £1.6 billion.

It is certain, then, that the scale of the problem is enormous, and the implications for the British economy significant.

“Unfortunately, the cost to the taxpayer has the potential to be very high, if the estimated losses turn out to be correct. Government will need to ensure that robust debt collection and fraud investigation arrangements are in place to minimise the impact of these potential losses to the public purse. It should also take this opportunity to consider now the controls it would put in place to protect against the abuse of any future such schemes.”

Gareth Davies, head of the National Audit Office
Contents
  1. What is Deemed as Bounce Back Loan Fraud?
  2. Dealing with Accusations of Bounce Back Fraud
  3. What are the Potential Penalties for Bounce Back Loan Fraud?

What is Deemed as Bounce Back Loan Fraud?

Bounce back loan fraud, or ‘misuse’ of a bounce back loan means you may have:

  • Set up a fake business in order to take out a Bounce Back Loan
  • Impersonated someone else, or another business to get a BBL
  • Used a third-party to take out a bounce back loan on your behalf, who then filed for bankrtupcy
  • Taken a Bounce Back Loan from multiple lenders simultaneously
  • Used the BBL to buy personal assets
  • Transferred the loan to your personal bank account
  • Increased directors salaries or dividends, funded directly by the BBL

You have have unwittingly committed Bounce Back Fraud due to not having read the rules correctly. Or perhaps another person within your business made these mistakes, thereby leaving fellow directors open to the repurcussions.

If your a director needing experienced bounce back loan support, contact us via live chat, telephone or email. We offer clear, practical advice to lay out options with full transparency. Our advistors specialise in helping stressed directors find positive solutions to business challenges.

Dealing with Accusations of Bounce Back Fraud

If you are facing a fraud investigation or prosecution due to misuse of a bounce back loan you should seek qualified legal advice from a firm specialising in this area.

Our expertise is in helping directors tackle the business of closing down limited companies with bounce back debt.

What Penalties Could Arise from Bounce Back Loan Fraud?

What are the Potential Penalties for Bounce Back Loan Fraud?

There are a wide range of possible penalties for BBLS fraud, covered largely under the main laws: the Fraud Act 2006 and the Theft Act 1968. These penalties will vary depending upon the severity of the fraud and the amounts of money involved.

Penalties include:

  • Fines
  • Disqualification as a director (for up to 15 years)
  • Imprisonment
  • Personal Liability to repay the debt, including compensation
  • Serious Crime Prevent Orders (SCPOs).
  • Civil recovery orders
  • Civil settlements or penalties