# Britain’s Lloyds racks up $350 million of likely scam COVID loans Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-09-06 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Lloyds Banking Group Hit by £300m COVID-19 Loan Fraud Meta Description: Lloyds Banking Group faces £300m in suspected Covid-19 loan fraud, highest among big UK banks. Government data shows 3.6% bounce back loans under suspicion. URL: https://financedigest.com/britains-lloyds-racks-up-350-million-of-likely-scam-covid-loanshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-09-06t122328z3lynxmpei850jfrtroptp4britain-economy-lloyds-1736815281105-compressed.jpg) By Lawrence White and Iain Withers LONDON (Reuters) -Lloyds Banking Group has been hit by more than 300 million pounds ($348 million) of suspected fraud linked to COVID-19 pandemic-era recovery loans for small businesses, the highest among big bank peers, according to government data. British banks overall have classified some 1.1 billion pounds worth of the emergency lending scheme known as “bounce back” loans as fraud, the data published on Monday by Britain’s Department for Business, Energy and Industry (BEIS) showed. Lloyds is the worst hit among big banks by net amount, and also saw a higher ratio of likely fraud with some 3.6% of its 8.5 [billion pounds of bounce back loans](https://www.financedigest.com/trafigura-enters-3-billion-loan-to-supply-germanys-sefe-with-gas.html "Trafigura enters billion loan to supply Germany’s Sefe with gas") categorised as under suspicion, according to a Reuters calculation from the data. That compared with 2.4% for Barclays’ 10.8 [billion pounds](https://www.financedigest.com/shell-to-evaluate-25-billion-pound-british-investments-after-windfall-tax.html "Shell to ‘evaluate’ 25 billion pound British investments after windfall tax") lending under the scheme, 1.7% for NatWest’s 8.9 billion and 1.3% for HSBC’s 7.3 billion. A Lloyds spokesperson said its rate of suspected fraud was lower than the 7.5% average estimated by the scheme’s adminstrator the [British Business Bank](https://www.financedigest.com/hsbc-acquires-british-arm-of-stricken-silicon-valley-bank.html "HSBC acquires British arm of stricken Silicon Valley Bank"). Where fraud has been identified, we have acted promptly and have already recovered the majority of these [funds without calling on the guarantee and we will continue to attempt to do so even after a claim](https://www.financedigest.com/russian-funding-claims-spice-up-italian-election.html "Russian funding claims spice up Italian election") has been submitted,” the spokesperson added. The other banks said the differing levels could partly reflect some lenders having more sophisticated [fraud detection](https://www.financedigest.com/the-clues-to-detecting-fraud-are-hidden-in-relationships.html "THE CLUES TO DETECTING FRAUD ARE HIDDEN IN RELATIONSHIPS") measures, as well as different thresholds for classifying a loan as suspect. The levels of fraudulent loans at the [lenders are not final and are subject to change](https://www.financedigest.com/credit-chameleons-lenders-must-tune-in-to-changing-customer-attitudes.html "Credit Chameleons – Lenders must tune in to changing customer attitudes"). Under the scheme rules, the government is responsible for the [fraud costs if banks](https://www.financedigest.com/attacking-banking-and-fintech-fraud-head-on-through-ai-infused-strategies.html "Attacking Banking and Fintech Fraud Head-On Through AI-Infused Strategies ") can prove they administered the scheme correctly. These schemes were implemented at unprecedented [speed to protect millions of jobs and businesses](https://www.financedigest.com/covid-19-is-impacting-the-variable-speed-drive-market-size-business-revenue-forecast-leading-competitors-and-growth-trends-2028.html "COVID-19 Is Impacting The Variable Speed Drive Market | Size, Business Revenue Forecast, Leading Competitors And Growth Trends 2028"). If the government didn’t move quickly, more businesses would have [failed and many more jobs](https://www.financedigest.com/britains-next-buys-failed-furniture-retailer-made-com-400-jobs-axed.html "Britain’s Next buys failed furniture retailer Made.com, 400 jobs axed") lost,” a government spokesperson said. Smaller online lenders were hit disproportionately hard by suspected fraud, with two classing as many as around one in four of their bounce back [loans as potential scams](https://www.financedigest.com/10-signs-of-loan-scams.html "10 Signs Of Loan Scams"). London-based New Wave Capital Limited – which trades as Capital On Tap – and Isle of Man-based Conister [Bank reported](https://www.financedigest.com/bank-funding-for-renewables-stagnates-vs-oil-and-gas-report.html "Bank funding for renewables stagnates vs oil and gas – report") 27% and 24% respectively of their loans as suspected fraud, according to Reuters calculations from the government data. New Wave Capital and Conister did not respond to an emailed request for comment. The latest data on overall fraud levels, first reported by Reuters on Friday, hints at a potential headache for [Britain’s ruling](https://www.financedigest.com/britain-plans-new-data-rules-to-ease-compliance-burden.html "Britain plans new data rules to ease compliance burden") Conservative party and bank bosses alike over how the emergency lending scheme was rushed through in 2020. A [junior government minister](https://www.financedigest.com/greg-hands-appointed-as-uk-junior-trade-minister.html "Greg Hands appointed as UK junior trade minister"), Theodore Agnew, resigned in protest at the handling of the scheme in January, saying efforts to stop fraudulent abuse on the loans was “woeful. The British [Business Bank](https://www.financedigest.com/how-banks-will-evolve-to-support-small-business-owners.html "How banks will evolve to support small business owners") has said appropriate fraud checks were in place from the start, and lenders administering the scheme said overall fraud levels were low. ($1 = 0.8624 pounds) [(Reporting By Lawrence White](https://www.financedigest.com/white-bullet-releases-ad-funded-piracy-report-for-world-intellectual-property-organisation-wipo.html "White Bullet releases Ad Funded Piracy Report for World Intellectual Property Organisation (WIPO)"), Iain Withers and Sinead Cruise, editing by Ed Osmond and Louise Heavens) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---