UK confirms $1.3bn of suspected fraud on COVID loan scheme

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FILE PHOTO: Outbreak of the coronavirus disease (COVID-19) in London

LONDON (Reuters) - The British government confirmed on Monday that around 1.1 billion pounds ($1.27 billion) of small business loans made under a COVID-19 emergency lending scheme has already been classified as suspected fraud.

Reuters first reported the figure on Friday, which gives the first firm indication of the potential level of scams perpetrated on Britain's so-called 'bounce back loan' scheme.

Banks handed out 47 billion pounds in total in government-guaranteed loans under the scheme from May 2020 to struggling small businesses hit by COVID-19 lockdowns.

($1 = 0.8683 pounds)

(Reporting by Iain Withers, editing by Lawrence White)