A congressional report has found that obscure financial technology companies “with little to no oversight from lenders” have fueled rampant Paycheck Protection Program (PPP) fraud.
A congressional report has found that obscure financial technology companies “with little to no oversight from lenders” have fueled rampant Paycheck Protection Program fraud. The report estimates a total fraud of about $64 billion, with fintechs contributing significantly to that total.
“At least tens of billions of dollars in PPP funds were likely disbursed to ineligible or fraudulent applicants, often with the involvement of fintechs, causing tremendous harm to taxpayers,” the congressional report states. One fintech called Kabbage had furloughed half of its employees who were tasked with assessing risk and reviewing accounts. Nonetheless, Kabbage continued funding PPP loans by outsourcing the work to “temporary contractors,” the report said.
Another fintech called Womply had fraud prevention practices described by lending partners as systems that were “put together with duct tape and gum.” The fintech was also accused of allowing “rampant fraud” to infiltrate the PPP.
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