Coronavirus fraud: 9 things small businesses need to know.
Where there is fear, there is fraud, unfortunately. With the recent COVID-19 pandemic, fraudsters have seized the opportunity to take advantage of individuals and businesses around the world. The U.S. Government has approved the Coronavirus Aid, Relief and Economic Stimulus (CARES) Act, which, along with other provisions, offers access to capital to small businesses negatively impacted by COVID-19, if they meet certain qualifications. However, along with that relief comes a multitude of fraudsters, poised and ready to take advantage.
Phishing attempts are already underway on grant and loan activities. When it comes to the Small Business Administration (SBA) loans, including the Economic Injury Disaster Loans (EIDL) and the Paycheck Protection Program (PPP), here’s what small business owners need to know:
1. The SBA does not solicit people (or businesses) directly.If you get an unsolicited phone call saying you’ve been approved for an SBA loan, that, unfortunately, isn’t true. Do not share any business or personal information with the caller. Anything you say can be used in fraud attempts later.
2. No loans are automatically provided to you.Again, if you’re contacted by someone promising funds through an SBA loan or grant, it’s too good to be true. They are counting on you and your employees to confuse their offer with the CARES Act. They might ask seemingly innocent questions to gather information which will ultimately lead to requests for upfront payment or bank information. Remember, while you might be eligible for some of these SBA loans if certain parameters are met, they still require application paperwork and additional documentation.
3. Don’t pay anything for “access to funds” or “faster payment”.This is a version of a common consumer scam: someone promises that if you pay some money upfront, you’ll get more money in return, and after you’ve made your initial payment, the fraudster will disappear. In another scenario, they will request a fee for “expedited payment” – which is not legitimate. The CARES Act does not offer paid expedited options and will not require upfront payment.
4. Never share Personally Identifiable Information (PII) over the phone or via email to an unknown source.Asking for this info is the definition of a phishing scam. Fraudsters are trying to catch you or your employees off guard, and it is easier to do so during a tumultuous time like in a global pandemic. Never provide private information without verifying your caller or email sender.
5. ALWAYS check email addresses and website URLs.
This should be common practice for all business owners and employees. Business Email Compromise (BEC) scams are alive and well and are a big part of pandemic fraud. A few things to consider:
- Always hover over links to see the web address before clicking.
- Never directly respond to emails from unknown senders – always create a new email when replying in these situations.
- Be skeptical of URLs and emails with multiple misspelled words or ones that use the wrong domain in their name (CDC.com, for instance, instead of CDC.gov).
6. A logo does not prove anything.
Fraudsters can easily steal logos. Many major organizations including FedEx, UPS, Amazon and even the IRS have had their logos stolen for fraudulent purposes. The people behind fraud attempts are creative and will put time into creating an email or website that looks legitimate. Be sure you’re accessing the proper web address – the URL should have “https” (rather than “http”) if it’s using a secure connection. Take the time to reach out to the SBA or your banker directly for all communication.
7. Know the legitimate SBA sources.
Be wary of clicking on internet ads or Google links. If you have a question or are seeking more information, visit sba.gov directly or call your banker.
8. Be sure to report any suspected SBA fraud.
Report any suspected fraud to the Office of Inspector General‘s (OIG) Hotline at 800-767-0385 or online.
9. Be aware that emotions can cloud your judgement.
A global pandemic is an incredibly stressful time for everyone and fraudsters are masters at preying on emotions. Be sure to stay rational when dealing with your money and private information. Don’t let your anxiety, anger or fear lead to mistakes. Remember to take time to research before taking action and never let someone pressure you into saying “yes”. It may save your business.
Fraud mitigation for small businesses
Small businesses should always be vigilant for scams. By knowing the best practices to prevent fraud, you can protect yourself year-round and be better prepared in times of heightened fraudulent activity, like the attempts surrounding the current coronavirus pandemic. Read more about fraud mitigation for small businesses.
- Protecting Your Small Business.
- Instances of Business Email Compromise (BEC) are increasing at an alarming rate.