COVID-19 Small Business Loans Scam Alert
As you’ve probably heard, The Paycheck Protection Program (PPP) represents a major portion of the U.S. government’s recently deployed CARES Act. The PPP consists of $350 billion in government-backed loans—distributed via private banks. Unfortunately, because so many small businesses have been affected, and because banks are implementing this program on the fly, the application process is running less than smoothly.
Amidst the overflow and confusion, cyber criminals and scam artists are taking advantage of some PPP applicants. Here’s how.
Banks tell COVID-19 small business loan applicants to wait.
“Don’t call us. We’ll call you.” Essentially, this is the message many local banks are sending Massachusetts business owners. “A representative will be in touch…” one email reads. Another says, “we’ll email you an update within a few days.” This investigative report reveals how several banks are advising applicants not to call or visit their local branch, emphasizing that the loan application is meant to be an online process. Meanwhile, scammers are issuing their own calls and emails, posing as bank representatives.
Bank communications may ask businesses to have sensitive information at the ready.
Many of these bank communications further advise businesses to have sensitive information available when a representative follows up. Banks are specifically asking owners to keep handy the dates of birth, social security numbers, and other personal info for all owners and controllers of their businesses. Not surprisingly, owners are eager to provide these details in order to put their applications in motion. But without any application ID numbers to reference, it’s easy to see how some information ends up in the wrong hands.
How to recognize and avoid a COVID-19 small business loan scam
If you receive a call or an email from someone claiming they represent your bank (or the bank where you’re seeking a loan), ask the representative to confirm they are legit by answering a few key questions. For example, a verified bank rep should be able to tell you when you first applied for the loan (date of your submission). They should also be able to tell you how much money you applied for.
Although we are not financial advisors, we want to be here for our clients in any way possible. If you have questions about your business insurance during this difficult time, please don’t hesitate to contact our main office line: 508.339.2951, or reach out to your account manager directly.