Emma RadmoreFCA has published a Dear CEO letter on its expectations of firms in reporting BBLS fraudulent activity. It notes the excellent levels of cooperation within the industry throughout the pandemic and in relation to BBLS schemes, but says that the unique nature of BBLS has led to it being the target of fraudulent activity. FCA expects firms to report all allegations of fraud where the borrower is an authorised firm, or a firm registered with FCA for MLR supervision. There is a dedicated email address for reports. FCA notes that once the report has been made the firm should continue its investigations and make any other appropriate reports, as telling FCA is not a substitute for any of these (not only to the traditional enforcement authorities but also to the BBB). FCA will engage with firms on any matter that is of particular interest to it.
FCA says there are various frauds that have been uncovered, such as applications on behalf of fake businesses, applications for ineligible borrowers using dormant companies and knowingly misstating information on application forms, particularly on levels of business turnover.
It notes that while many frauds are discovered at application stage, some may only come to light during collection and recovery activities, and FCA urges firms to be alert to this, and to make sure they are properly resourced to ensure swift action and reporting.
Finally the letter reminds firms of its key messages and the application of CONC 7 to SME collections and recoveries.
