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The 2021 Budget is due to be delivered by Chancellor of the Exchequer Rishi Sunak tomorrow. Ahead of a likely new business loan scheme, Matthew Cox, Managing Director EMEA, Fraud, Security & Financial Crime, at the analytics firm FICO urges that the Government and banks apply stronger checks on the new scheme than they did for the scheme brought in for the first lockdown in spring 2020.
“When the bounce back loan scheme was set up, the government rushed to roll it out because they needed to, and they didn’t put all the normal controls on loans at the bank level. As a result at the end of last year the fraud was estimated [by the National Audit Office] at £15-26 billion. It may only be when banks start to attempt to recover the debt later this spring that the true size of the problem becomes clear.
“Ahead of the closure of the first loan scheme it would also make sense to get on top of the potential fraud problem. Network analytics could be used to identify potential fraud across all the applications already made. It would be too late to wait until the payments are due to start.
“Using advanced link analysis, all the connections between loans, like common phone numbers or company names or addresses, could be found. Banks should get all the data together, use the analytics to find everyone who made more than one application, put all those into a bucket, then start contacting them. The money may be gone, but no one can abscond with it, they can’t even leave their house! Then run some first-party fraud definitions on the rest, and tell the suspicious accounts, “I need to talk to you.” Automated notifications like SMS and App Push could be used for account holders that have made an application. Plus the government should consider having a consolidated collections process across the banks that made the loans.
“As the new loan scheme is launched, it is critical that this doesn’t add another cost to the ever-increasing taxpayer bill.”
At the Association of Convenience Stores (ACS) chief executive James Lowman urged a tapering of the reintroduction of business rates. He said: “The operational challenges of the pandemic are not yet behind us. Local shops are still investing in additional services, Covid-secure measures in store, and increased staffing costs to cover absences, so a sudden shock of high business rates costs, especially for those with high rateable values in city centres that have been hit hard over the last year, could be devastating.”
Meanwhile Home Office Minister for Crime and Policing Kit Malthouse has been confirmed to address the ACS’ crime seminar on March 23, when the trade body will publish its annual crime survey of the sector.