I Asked the Financial Conduct Authority (FCA) How Many Firms They Regulate Have Been Reported, Investigated and Prosecuted for Bounce Back Loan Fraud/Wrongdoing – Take a Look At What They Told Me

Please do not choke on your coffee, which is what I nearly did when reading the Financial Conduct Authority’s (FCA’s) replies to my questions below.

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Thank you for your email of 9 October 2023, in which you asked:

  • Question 1 – How many FCA regulated firms have you to date investigated for BBL related wrongdoing.
  • Question 2 – How many FCA regulated firms have been reported to you for Bounce Back Loan related wrongdoing.
  • Question 3 – How many FCA regulated firms have you prosecuted and/or taken action against for BBL related wrongdoing, i.e., prosecuted or sanctioned etc.

On 6 November 2023, in relation to question 2, you confirmed that you would like all three sources of reports regarding Bounce Back loans (BBLs) included in the response, these being:

  • Whistleblowing reports
  • Financial Crime reports
  • Consumer or firm contacts made to our Supervision Hub

Question 1

We hold information relevant to your request, but we are unable to disclose it to you as we are of the view that making this information public at this stage would be likely to prejudice the exercise by the FCA of its regulatory functions under FSMA. The information is therefore exempt from disclosure under Section 31 (Law enforcement) of FOIA.

Question 2

Where you refer to ‘wrongdoing’, we have taken this to mean reports of fraud.

In our email of 6 November 2023, we advised that we receive information relating to BBLs from various sources, one of these being Financial Crime reports.

After discussing this further with the business area, it has come to light that we would not receive reports about BBLs via our Financial Crime Department. Instead, these are received by our Retail Banking Directorate. Please accept our apologies for this oversight.

Whistleblowing Reports

From March 2020 to date, we have received 102 reports concerning the Coronavirus Business Interruption Loan Scheme and BBLs – 11 of these relate to alleged BBL wrongdoing and 18 firms were identified. Because each report may contain allegations against one or more FCA regulated firms, there are more firms identified than reports of BBL related wrongdoing.

Retail Banking Reports

We have asked lenders to report cases of FCA-authorised firms who are suspected of committing fraud against the BBL scheme. We can therefore confirm we have received 137 referrals from lenders in relation to such suspected fraud.

Intelligence & Supervision Hub

We would like to explain that there is no specific category to log reports relating to BBLs, therefore both areas completed a key word search which generated over 1,000 potentially relevant records.

We would therefore need to review each record to determine if they concern ‘wrongdoing’, and this would significantly exceed the cost limit under FOIA.

Finally, as explained above, we receive information relating to BBLs from various sources.

As this is not recorded centrally the figures provided above may overlap.

Question 3

Whilst there have been no public prosecutions to date it is important to stress that a broad coalition of National Economic Crime Partners are involved with issues arising from the Bounce Back Loan Scheme and that all partners share intelligence as appropriate on this matter.

Formal enforcement action is accompanied by the issuing of an accompanying Final Notice – these are, with the exception of a very small number for very specific reasons, published on the Publications page of our website. We can confirm that no Final Notices (published or otherwise) have been issued in relation to investigations into Bounce Back Loans.