The Insolvency Service continues to unearth individuals who applied for Bounce Back loans by inflating their turnover estimates or applying for loans when their company was not trading.

In recent cases, five individuals have separately been made subject to bankruptcy restrictions totalling forty-eight years as the Insolvency Service continues to identify and tackle abuse of the Bounce Back Loan scheme.

In each of the five separate cases, the Bounce Back Loans were either wrongfully obtained through overstating businesses turnover, or on behalf of a company that had already ceased trading prior to the pandemic or were simply misused for personal use rather than legitimate business spending.

Bankruptcy restrictions mean none of the convicted individuals are able to borrow more than £500 without disclosing their bankrupt status. They also cannot act as a company director without permission from the court.

In each case, the local Official Receiver is working on potential recovery action.

These cases provide further evidence that government efforts to provide financial support for ailing companies during the COVID pandemic have been abused, and we are likely to see more action in this area in the coming months by the Insolvency Service.

Source: New feed