Lord Agnew refuses to withdraw attack on Starling Bank over Covid loans unless data proves him wrong
Lord Agnew claimed Starling failed to carry out thorough checks on borrowers before making loans under the £47bn bounce-back loan scheme, but Starling strenuously denied the allegation.
Image source: Anne Boden/Starling Bank.
The former government fraud minister said he would not withdraw his public attack on Starling Bank, saying it was “one of the worst” in handing out government guaranteed loans, unless he sees data that proves him wrong.
Lord Agnew claimed Starling failed to carry out thorough checks on borrowers before making loans through the £47bn bounce-back loan scheme.
Lord Agnew said The temperature“I have no intention of retracting my comments until I can see data that reassures me.”
He submitted several questions about the lender’s performance on the scheme.
But the online lender has denied claims by the former Tory minister, who resigned as anti-fraud minister in January over the government’s “lamentable” efforts to control fraud.
Starling CEO and founder Anne Boden said she was shocked by his comments.
The bank also demanded that its claim be withdrawn that from the ‘little data’ it was able to gather the bank was ‘one of the worst when it came to validating turnover. businesses or to submit suspicious activity reports”.
A spokeswoman for Starling said: ‘We are meeting with him shortly to discuss his observations. We hope that once we meet with him, he will understand that the comments he made about us are factually incorrect and will withdraw his remarks.
Starling refused to give AltFi details of when the meeting was to take place or who would attend. But a person close to Starling said Lord Agnew never contacted the lender when he was minister to request data from the bank.
Last month Lord Agnew publicly singled out Starling as one of the worst offenders, saying he had used the Covid loan scheme as a ‘God-sent opportunity’ to swell his balance sheet without carrying out enough corporate checks to repay the loans.
He pointed to a significant increase in lending from the bank since the program was established.
Before the pandemic, in November 2019, Starling had loaned out £23million, excluding loans bought from other companies. By June 2021, he had handed out £1.6bn in bounce-back loans.
Starling also handed out £640m under another government-backed scheme, the Coronavirus Business Interruption Loan Scheme, which offered up to £5m to a borrower.
“It seems to me that they took this as a divine opportunity to inflate their balance sheet by a factor of 50 in just under a year, with no risk to themselves and 100% to the taxpayer,” Lord said. Agnew. .
But Boden said the bank had introduced additional checks, including for sole traders.
Big banks and online lenders have handed out £47billion to small businesses under the Bounce Back loan scheme during Covid. The government has promised to cover 100% of losses if companies do not repay.
Critics of the scheme say minimal checks have been carried out to stop fraud and the cost to the taxpayer could be as high as £5billion.