State and Federal Agencies Have Warned that Scammers are Taking Advantage of Those Eager to Apply for Loans Through the Recently Passed CARES Act
Small business owners should be on the lookout for scams related to the recently passed Coronavirus Aid, Relief and Economic Security (CARES) Act, the $2 trillion stimulus package signed last week that aims to help Americans negatively affected by the COVID-19 Pandemic.
The Minnesota Department of Revenue and the United States Office of the Inspector General both sent warnings of potential CARES Act fraud on Monday.
The Paycheck Protection Program (PPP), a provision of the CARES Act that authorizes $350 billion in Small Business Administration loans to companies looking to retain workers and stay open during COVID-19, is a particularly attractive option for business owners. The surge in interest and inquiries lends itself well to potential fraud, with scammers looking to take advantage.
“The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) authorizes stimulus payments to those who qualify,” read a statement from the Minnesota Department of Revenue. “As a result, scammers may target Minnesotans and try to steal their personal information.”
The Department of Revenue’s statement adds that the SBA will not contact those in need of a loan; instead, interested borrowers should reach out to lenders authorized to originate loans under the PPP. It goes on to say consumers should be wary of emails, text messages or phone calls that request bank information in order to receive a payment under the stimulus plan.
The Inspector General issued a similar warning.
“Fraudsters have already begun targeting small business owners during these economically difficult times. Be on the lookout for grant fraud, loan fraud, and phishing,” read the Inspector General’s statement.
The Inspector General listed the following tips to prevent fraud:
- SBA does not initiate contact on either 7a or disaster loans or grants. If you are proactively contacted by someone claiming to be from the SBA, suspect fraud.
- If you are contacted by someone promising to get approval of an SBA loan, but requires any payment up front or offers a high interest bridge loan in the interim, suspect fraud.
- Look out for phishing attacks/scams utilizing the SBA logo. These may be attempts to obtain your personally identifiable information (PII), to obtain personal banking access, or to install ransomware/malware on your computer.
- If you are in the process of applying for an SBA loan and receive email correspondence asking for PII, ensure that the referenced application number is consistent with the actual application number.
- SBA limits the fees a broker can charge a borrower to 3% for loans $50,000 or less and 2% for loans $50,000 to $1,000,000 with an additional ¼% on amounts over $1,000,000. Any attempt to charge more than these fees is inappropriate.
- Any email communication from SBA will come from accounts ending with gov.
- The presence of an SBA logo on a webpage does not guaranty the information is accurate or endorsed by SBA. Please cross-reference any information you receive with information available at sba.gov.
- If you have a question about getting an SBA disaster loan, call 800-659-2955 or send an email to email@example.com.
- If you have questions about other SBA lending products, call SBA’s Answer Desk at 800-827-5722 or send an email to firstname.lastname@example.org.
Interested in Applying for a Loan Through The Paycheck Protection Program?
Sunrise Banks is participating in the PPP as a preferred SBA lender. However, we’re waiting until further guidance is issued by the SBA to start processing loan applications.
In the meantime, interested borrowers should start gathering documents that may be helpful during the loan process, including profit and loss statements, payroll information, tax returns, mortgage or rent statements, utility bill statements, etc.
Anyone interested in applying for a PPP loan should sign up for updates on the program here.