Former minister accuses Starling Bank over Covid loans

theguardian.com:

Former Tory minister Lord Agnew has launched a public attack on Starling Bank, dragging the online lender into the Covid loans scandal by claiming it did not run adequate checks on borrowers before handing out taxpayer-backed loans.

During the pandemic, the UK government relied on high street and online banks to hand out £47bn to small businesses under the bounce back loan scheme, which offered up to £50,000 per company. The Treasury promised to cover 100% of the losses if borrowers failed to repay. In the rush to distribute money, critics say minimal checks were made to prevent fraud and the cost to the taxpayer could be as much as £5bn.

Agnew, whoquit as the anti-fraud minister in January over the government’s “woeful” efforts to control fraud, spoke publicly on Wednesday evening to say banks should be “very careful” before tapping the government guarantee.

However, he singled out Starling Bank and accused the lender of using the scheme for its own benefit. “With minimal data, I cannot analyse the full extent of the misdemeanours, but I’d like to call out one of these banks that I believe has acted against the government’s and taxpayer’s interests: this is Starling Bank,” he told guests at an anti-fraud event in Westminster.

Starling Bank’s chief executive and founder, Anne Boden, said she was “shocked” by Agnew’s comments, and has asked the former minister to withdraw his statements. Boden said Starling had been open and transparent about its approach to bounce back loans and was one of the “most active and effective banks fighting fraud”.

Agnew pointed to a significant rise in the bank’s lending balances since the scheme went live. Back in November 2019, before the pandemic, Starling had only lent £23m, excluding loans