UK banks have begun freezing accounts to claw back fraudulently acquired Bounce Back loans.
Organised criminals and opportunistic business owners have been abusing the Government’s financial support schemes since they began. But now, as banks strike back on fraudsters, genuinely struggling businesses could be unfairly accused of fraud and see their bank accounts wiped in a flash.
Banks must ensure their fraud detection is accurate and justified. Alex Boothroyd, Senior Banking Fraud Solutions Specialist, SAS UK & Ireland said: “Britain’s banks cannot turn a blind eye to rampant COVID loan fraud. Ultimately, it’s law-abiding businesses and taxpayers that pay the price – £26 billion in fraud and defaults according to the National Audit Office – as organised criminals and opportunistic business owners steal from the public purse. Banks must act quickly, but if they fail to be accurate and fair, they’ll irreparably destroy the trust of genuinely hard-up customers.
“Investigating COVID loan fraud is not a simple task. With new loan initiatives like this, especially where rapid implementation and go live was essential, there will inevitably be error as well as fraud, which can make it more difficult to pinpoint the actual fraud cases. The ‘unprecedented’ nature of the pandemic also hampers investigators and automated systems searching for anomalies in normal behaviour. Spotting a significant deviation becomes more difficult given that few of us are using money in same way as before the pandemic.
“Automated anti-fraud technology using AI is one key to catching the criminals and helping to protect the public. Banks must make use of scenario-based modelling to quickly learn from multiple ‘what-if’ scenarios. From here, efficient models with a low rate of false positives can help to more accurately detect criminal behaviour.
“Banks that have enabled flexible data-sharing and automated anti-fraud tech will be better able to weed out fraudulently acquired loans without disrupting the day-to-day activities of those in genuine need of Government support. At this critical time, banks that get it wrong will pay a heavy price in ongoing and future customer loyalty and trust.”