Barclays steps up fight with Covid loan fraudsters

An attempt by Barclays to recover millions of pounds from covid loan fraudsters led to an increase in companies forced to liquidate last month.

The number of forced liquidations rose to 242 in October, compared to 210 in September and just 53 a year earlier.

It was the highest number since before the pandemic, when government support schemes and bank payment holidays provided a lifeline to ailing businesses.

The Insolvency Service said the increase was driven in part by “a large number of petitions” from one bank, Barclays, which issued 45.

But there was also a broader increase in the number of companies going out of business.

The Mail on Sunday revealed earlier this year that Barclays has engaged a litigation agency to recover funds from approximately 100 Bounce Back Loan (BBL) borrowers so far identified as suspected fraud.

Barclays made 345,006 loans worth £10.8bn under the government-backed BBL scheme, but an estimated £259m was siphoned off by criminals.

Companies can be forced into liquidation when creditors, such as banks, request liquidation.

It does not mean that those companies are suspected of fraud. But Barclays’ pursuit of fraudsters increased the total number of companies it targeted.

A spokesperson for the bank said: ‘Barclays is seeking to support customers experiencing financial difficulties, including those who have borrowed under government schemes.

“In certain circumstances, including where there appears to be misuse of funds, formal remedial action may be taken to recover taxpayers’ money.”

The official figures also showed that corporate insolvencies in general — including voluntary liquidations, administrations and restructuring agreements known as corporate voluntary arrangements — rose by 1,948 last month, 38 percent more than last year.