LONDON (Reuters) - The rate of fraud for state-backed loans to small companies in the COVID-19 pandemic is about five times normal levels, a senior Lloyds bank executive said on Monday.
Banks in Britain came under huge pressure to process billions of pounds of so-called ‘bounce back’ loans to companies struggling to stay afloat in lockdowns since March to fight the pandemic.
“We have gone to great lengths to stop fraud on bounce-back loans,” David Oldfield, chief executive of Lloyds’ commercial banking arm told parliament’s Treasury Select Committee.
There was evidence of fraud on 3% of loan applications, whittled down to less than 1% following further checks, still five times higher than on normal loans, Oldfield said.
There was a trade off between checking for fraud and getting money into customers’ account quickly, typically the following day, Oldfield said.
Reporting by Huw Jones, Editing by Iain Withers
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