Warnings over Bounce Back Loan scams

James Glen Car Sales, a car dealership in Airdrie, issues Bounce Back Loans scam warning to other small business owners as it nearly loses £40,000 on a Porsche Cayman GTS to fraudster

A shocking video surfaced on Facebook recently of a potential scam relating to exploitation of the government’s Bounce Back Loans scheme – a scheme aimed to help smaller businesses access finance at a quicker rate during the COVID19 outbreak.

James Glen Car Sales, based in Airdrie in Lanarkshire, Scotland, was the unfortunate target of a near-miss scam that could have seen the dealership lose £40,000. The salesman in question, Stephen Bogan, who runs the dealership in partnership with his father Jim, detailed the situation in this video. In it, he explained how the fraudster attempted to steal a Porsche Cayman GTS worth £40,000 using a Bounce Back Loan submitted using the company’s name and address from an earlier sent invoice.

Bogan stated: “It smelt a bit funny from the off. He [didn’t want to] leave a deposit […] the alarm bells were there.

The fraudster listed their company as BB Ltd which, as it turned out, stood for Bounce Back Loan. The fraudulent details were found out once Bogan rang the bank to check the funds were legitimate before releasing the vehicle.

Bounce Back Loans can be applied for by any small business based in the UK, established before March 2020 who have suffered as a result of the Coronavirus. Whilst Bogan went on to state that the company had never had cause to use a Bounce Back Loan and had no intention of doing so, he did warn other car sales dealers of the likelihood of this new form of scam cropping up.

Remain vigilant for fraudulent scams and risks

Bogan went on to say: “Always trust your gut. Double check, triple check everything. If something’s not sitting right with you, just bin it. Drop the sale. You need to be unbelievably vigilant. […] had we not been so careful, and double checked with the bank, we would have put this car out.”

With no fee repayments due during the first 12 months, it is likely that more scams such as the one that affected James Glen Car Sales will emerge from Bounce Back Loans. Whilst the scheme itself is designed to help businesses get back on their feet during the COVID19 pandemic, it is also incredibly important that business remain vigilant, and learn from this example to double check all sales before releasing any goods – especially when large sums of money are involved.

On 26th June, a letter written to the Chancellor indicated the potential for exploitation of this scheme, and the BBLS (Bounce Back Loan scheme) as an opportunity “to defraud the UK”. In July the first few arrests were made in connection with fraudulent applications to the BBLS. Banks should also undertake due diligence when assessing such loans, but have also stated that loans like the BBLS are subject to ‘appropriate fraud checks’, and fraudulent applications will be criminally prosecuted.

Examples like the one from James Glen Car Sales, whilst shocking, are sadly not going to be the last heard of Bounce Back Loan scams like this. All that remains is for businesses to double check incoming transactions, remain vigilant, and be aware of the rise in risk that could badly affect small business owners.

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