![]() ![]() ![]() Banks and lending partners collaborating with fintechs admitted doing little to check for fraud in fintech-approved loan applications.įintechs invested little in fraud prevention.Fintechs profited off processing fees for each approved loan, meaning they had little incentive to find fraud that would cut into their revenues.Many fintechs "failed to stop obvious and preventable fraud" because they had little to no fraud prevention efforts in place.This week's congressional report appears to confirm those allegations of widespread fraud.ĭuring an 18-month-long investigation preceding Thursday's report, the House Select Subcommittee on the Coronavirus Crisis reviewed about 83,000 pages of internal emails, messages and other documents from more than a dozen fintechs and interviewed former employees, executives and lending partners.Ĭongressional investigators filled 130 pages of the report with their findings, including: That amounts to $64 billion in potentially wasted taxpayer money. Kruger and his colleagues reported in a study they published last year that 1.4 million PPP loans show signs of fraud. Investigations Virtually all PPP loans have been forgiven with limited scrutiny ![]() They were lauded for those efforts.īut that speed and reach came at an expense, says Samuel Kruger, an assistant professor of finance at the University of Texas at Austin. Fintechs also reached more independent contractors, as well as businesses run by women and people of color, than long-established banks did. Congress hastily rolled out the program in spring 2020, eventually racking up a price tag of nearly $800 billion.įintechs, a nebulous term broadly defined as businesses that use technology to improve or automate financial services, told Congress they could issue PPP loans to struggling small businesses faster than traditional banks - and they did. PPP provided more than 11 million potentially forgivable low-interest loans to small businesses to help them keep employees on the payroll as COVID-19 shutdowns decimated profits. Bluevine, a fintech noted in the report, told NPR it adapted to threats of fraud better than other companies mentioned.Ī sprawling congressional report accuses several little-known financial technology companies, or fintechs, of reaping "billions in fees from taxpayers while becoming easy targets for those who sought to defraud the PPP," or Paycheck Protection Program. I will be filing a complaint with the U.S Treasury and the Attorney General of the state to get answers.A congressional report found financial technology companies, or fintechs, largely fueled PPP loan fraud. Further harming consumers like this during a national crisis is unjustifiable. I can see so many people are going through the same thing with this company. This company procedures and policies is unfair and very deceptive. The SBA claims that I am approved and should have received the funds. I’m still in the database that I received the loan. I was told an adverse action has been taking and I was denied and that was final without any explanation as to why. When I reached out to see why they didn’t fulfill their promise. I made many attempts to speak to someone regarding this issue to be told by their agents that my file has been check and everything looks good for funds to be disbursed. I was told I would receive my funds within the week but never have. I was approved on and signed all of the documents. I applied for a loan with Blueacorn under the CARES Act. ![]()
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