Crooks cash in on Covid loans
FRAUDSTERS are targeting Britain’s banks by using dormant companies to access Government-backed emergency coronavirus business loans, according to financial crime expert Quantexa.
Chief executive Vishal Marria said that Quantexa, whose artificial intelligence systems are used by banks and other financial services companies to help detect fraud, had seen a large increase in attempts by criminals to take advantage of the pandemic to illegally claim Covid19 rescue loans.
The warning comes as banks set increasingly large amounts aside to cover loans that they fear will turn bad due to coronavirus. So far, Britain’s five biggest banks, Barclays, HSBC, Lloyds, Natwest and Santander, have set aside approximately £10.2billion to cover potential bad debts due to the pandemic.
Marria explained: “We’ve seen a huge influx in lending fraud. For example, there are dormant companies that suddenly ask for credit lines.
“They’ve been dormant for years and then ask for say, £5,000. It’s fraudsters trying to exploit the pandemic.”
He added: “Certain clients are doing 10 times the volume of
SAVERS should prepare themselves for rates to go even lower, Leeds Building Society chief executive Richard Fearon warns.
According to Moneyfacts, the average rate on easy-access savings accounts is 0.74 per cent. However this is likely to fall, Fearon said, as the Bank of England’s base rate, which helps set interest rates for accounts, is at a record low of 0.1 per cent due to the pandemic.
“We’ll do all we can to protect them, but unfortunately for savings customers, rates are likely to drop further,” he said. He added that housing market activity had recovered strongly. The mutual made a profit of £26.8million during the first half, down 27.3 per cent, due to activity levels dropping off in lockdown. loan applications more than they have in years, which brings lots more risk. Some of that is from fraudsters, some of that is from legitimate companies that can never pay back their debts.”
He added that Quantexa had also seen a “massive increase” in the number of people who act as “money mules”, individuals that allow fraudsters to use their personal bank accounts to help them launder money in exchange for a fee.
Tomorrow, HSBC will report its first half results and new chief executive Noel Quinn is expected to say its bad debts provisions have shot up due to disruption caused by coronavirus to the global economy. So far, it has set aside £2.3billion to cover loan impairments.
According to the consensus forecast from City analysts, HSBC’S Quinn will report that its first half net profits have tumbled 88.5 per cent to £749.1million. Revenues are forecast to be down 15.9 per cent to £19.7billion. Normally the bank pays one of the largest, most reliable dividends but will not this year due to orders from the Bank of England.