Director of mobile phone shops given suspended sentence for £150,000 Covid loan fraud
Source: gov.uk (2025-06-13)

Zahid Afzal, of Pembrokeshire, fraudulently claimed extra Covid Bounce Back loans for his phone sales and merchandise companies.

Zahid Afzal claimed £150,000 in Covid loans – most of which he moved to personal accounts.

He had already received Bounce Back loans for his two companies when he applied for three more.

He was handed a two-year suspended sentence, and 300 hours of unpaid work, at Swansea Crown Court on 12 June 2025.

The director of two companies which run mobile phone shops across the UK has been handed a two-year suspended sentence, after he fraudulently claimed £150,000 in Covid Bounce Back loans.

Zahid Afzal, the director of Phone Bits Ltd and Phones Onn Ltd, had already received Covid loans for both companies legitimately – totalling £52,500 – when he applied for three more.

The 37-year-old, from Haverfordwest, falsely claimed the applications were the first he had made and exaggerated the turnover of each company.

He received the three additional loans of £50,000 each – one for Phone Bits Ltd and two for Phones Onn Ltd – between May and November 2020.

Afzal was sentenced for three counts of fraud by false representation at Swansea Crown Court on 12 June 2025.

The Insolvency Service is seeking to recover the fraudulently obtained funds under the Proceeds of Crime Act 2002.

Insolvency Service Chief Investigator David Snasdell said:

It is clear from our investigations that Zahid Afzal felt he could continue to apply time and time again for loans he was not entitled to.

Not satisfied with the substantial funds he had legitimately received, he went on to lie on applications and exaggerate his companies’ turnovers.

His sentencing should serve as a reminder to those contemplating fraudulently pocketing taxpayers’ money to think again.

Afzal’s companies ran mobile phone shops or kiosks in Carmarthen, Shropshire, Andover and North Devon.

The Insolvency Service investigation did not find any wrongdoing with the use of his initial loans for Phones Onn Ltd (£20,000) and Phone Bits (£32,500), which he was entitled to and were used entirely for business purposes.

But he moved the majority of the £150,000 he received from his second round of loans to personal accounts despite stating they were for business purposes.

The Bounce Back loan scheme helped small and medium-sized businesses to borrow between £2,000 and £50,000, at a low interest rate, guaranteed by the Government.

The loans were made on the condition that they were not to be used for personal purposes, but could be used, for example, to purchase a company asset such as a vehicle, if it would provide an economic benefit to the business.

The money lent to a company had to be paid back, over six or 10 years, with payments starting 12 months after the company received the loan.

Further information:

Zahid Afzal: DOB 09/03/1988 of Albert Street, Haverfordwest, Pembrokeshire.

Phone Bits Ltd (https://find-and-update.company-information.service.gov.uk/company/10136495) Company number 10136495, registered in Andover.

Phones Onn Ltd (https://find-and-update.company-information.service.gov.uk/company/11771257) Company number 11771257, registered in London.

Zahid Afzal was charged on three counts in relation to sections 1 and 2 of the Fraud Act 2006.

Read more about the Bounce Back Loan Scheme and the action the Insolvency Service can take if it finds misconduct. (https://www.gov.uk/government/publications/fact-sheet-bounce-back-loans/fact-sheet-bounce-back-loans#if-we-find-misconduct)

The Insolvency Service can investigate complaints about corporate abuse by live companies. This may include serious misconduct, fraud, scams or dishonest practice in the way the company operates. Further information on our live investigations can be found here (https://www.gov.uk/government/publications/the-insolvency-service-company-investigations-what-we-do/company-investigations-what-we-do)

Further information about the work of the Insolvency Service, and how to complain about financial misconduct. (https://www.gov.uk/government/organisations/insolvency-service)