Pandemic Fraud Could Top 27 Billion Pounds

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December 4th 2021
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Pandemic Fraud Could Top 27 Billion Pounds

New report details bounce back loan and universal credit fraud over a twelve month period to March 2021.

Errors and fraud already account for an up to £52 billion cost to the public purse, but the rushed schemes brought about by the pandemic will stamp a hefty addition to that figure.

In the twelve month period from April 2020, billions of pounds worth of additional fraud and error have occurred.

The Universal Credit scheme to help those requiring income support saw an all-time peak of 14.5 percent fraud rate. 14 in every 100 claims being deemed fraudulent - worth a staggering £5.5 billion.

The zero-checks loan scheme drastically cobbled together to prevent small businesses from ruin is looking at a fraud or default rate of between 35-60 percent. This is another £16 to £27 billion that will not be recouped due to non-payment.

Annually, undetected fraud and error (outside of tax and benefits) already costs up to £25 billion per year and the pandemic schemes are now another hit on top of that.

Across the UK 40 percent of all crime committed is within the fraud classification. The government has 16,000 counter fraud employees working to understand and reduce fraud risks.

At the moment, HMRC are investigating over 12,000 pandemic support scheme claims such as furlough, SEISS and eat out to help out - with arrests already having been made and continuing.

The Public Accounts Committee who put together the report this week have laid out a number of recommendations for the government to reduce the continued exposure - including steps to implement a zero-tolerance approach to detected fraud, application of high-tech innovation to fraud detection and increase co-operation between departments when investigating fraud.

Tagged in:

loans bbl pandemic fraud
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