Starling Bank threatens legal action in letter to former minister over Covid loan fraud

The boss of digital bank Starling has threatened to take legal action against the former anti-fraud minister over his comments on his Covid loan fraud case.

In a letter to Lord Agnew of Oulton, chief executive Anne Boden slammed the former minister’s claims that the bank failed to end fraudulent state-backed Covid lending activity “wild accusations”.

She wrote, “Your statements are defamatory and I must ask you to retract them. You say you have no information to back up your accusations, but you continue to repeat them despite Starling making it clear you were wrong.”

Swansea-born Ms Boden, who set up the mobile-only bank in 2014, reiterated her demand that Lord Agnew withdraw his comments, threatening legal action if he does not, writing: “Starling reserves all its rights with respect to your defamatory statements.”

She further accused the former minister of criticizing the bank for “clearing yourself of the responsibilities you accepted when you took the post of minister”.

“We only met once, on a video call during the pandemic, when I explained to you how the program works. I understand that you didn’t like the fact that I explained the program to you. .I don’t know if you were upset because you didn’t understand the scheme or because I had the audacity to speak up,” she wrote.

The letter from Starling’s boss follows the government’s former fraud minister publicly criticizing the bank for its alleged poor performance in preventing pandemic fraud.

Lord Agnew resigned as anti-fraud minister in January over the government’s failure to prevent and monitor fraud under the £47bn bounce-back loan scheme.

In a speech at Westminster Abbey last month, The temperature revealed Lord Agnew singled out Starling saying it had ‘acted against the interests of government and taxpayers’ and was one of the worst banks at preventing fraud and reporting suspicious activity.

He claimed that Starling hadn’t taken its anti-fraud responsibilities seriously enough, adding that Starling was “one of the worst when it came to validating company turnover or submitting fraud reports. ‘suspicious activities’.

“Of course, being new to the block, most of their candidates were not already clients and so any reasonable institution would have been doubly careful about pouring the money out the door. But the opposite happened. product,” said Lord Agnew.

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He further claimed that the bank had used the loan scheme to inflate its “balance sheet by a factor of 50 in just under a year, with no risk to itself and 100% to the taxpayer”.

Ms Boden said she was shocked by Lord Agnew’s comments and demanded he withdraw his claims.

She said: “I am shocked by Lord Agnew’s comments. We have always been very open and transparent about our approach to BBLS loans and, in fact, I have described the process – chapter and verse – in my book. We have been one of the most active and effective banks in the fight against fraud and, in fact, during the special Treasury committee on December 14, 2020, I was asked why we were rejecting so many requests compared to other banks .

“The comments raised by Lord Agnew about not verifying companies’ turnover or submitting suspicious activity reports are absolutely and utterly untrue and I must ask him to retract his statement.”

Ms Boden added: “Lord Agnew at no time asked us for information on any of the issues he raised. We attended a meeting which he was present at. Otherwise his engagement with us was void. “

The the former minister refused to withdraw his claims unless the digital lender can prove it wasn’t “one of the worst performers” when it comes to handing out state-backed emergency loans.

He said The temperature“I have no intention of retracting my comments until I can see data that reassures me.”

He submitted a series of questions about the lender’s performance on the plan.

The Bounce Bank Loan Program was set up in April 2020 by the UK government to keep trading companies afloat during the coronavirus pandemic.

It allowed businesses to borrow up to 25% of their annual turnover up to £50,000, and meant borrowers had to self-certify their 2019 turnover to secure loans.

A total of 1.6 million taxpayer-backed loans worth £47 billion have been issued under the initiative.

Lord Agnew has previously said the scheme was a ‘vital intervention at an extraordinary time’ but was ‘terribly implemented’.

The government has estimated that more than a third of loans will never be repaid due to fraudulent activity and the default of legitimate borrowers.

State-guaranteed loans were granted with only slight checks on borrowers.

During the coronavirus pandemic, Starling Bank provided £1.4 billion in Covid rebound loans to its business account customers, with 66% of recipients based outside of London.

Earlier this year, Ms Boden said BusinessLive Wales that all banks have been mandated to carry out very rigorous fraud checks.

“The Rebound Bank Loan Scheme was intended to get loans of up to £50,000 to small businesses as quickly as possible. Starling did all those checks,” she said.

“With a system of this size, there would always have been fraud. But there is no expectation at this time that, in the system as a whole, this fraud will be more than expected.

Ms. Boden added: “If a bank has not implemented the processes as defined, then the bank must take responsibility. I can only speak for Starling, but we have done all the necessary anti-fraud checks. I think most banks have done that as well.

“The overall percentage of fraud is likely within the expected levels set at the start of the program.”

As of March 31 last year, £2.07bn of Starling’s £2.23bn loan book was guaranteed by the state through its use of emergency schemes. The bank has since diversified its loan portfolio.

The fast-growing fintech company has three million customers in the UK and is expected to list on the London Stock Exchange within the next two years. Last month, its operations in Cardiff reached almost 900 staff, far exceeding initial job creation forecasts.

The company originally pledged to create 400 jobs when it unveiled its office investment at Brunel House in the capital in 2020. However, that figure has risen to 868, a 117% increase on the plan. initial business.

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