Scammers Target Small Business PPP Loans, BBB Reports


The Better Business Bureau has found another fraud, this time involving small businesses.

Many small businesses struggled during the COVID-19 pandemic. Fewer clients meant less money, and they eventually struggled to make payroll, pay for employee benefits, and keep the lights on.

To assist small company owners and stimulate the economy, Congress created the CARES Act. The CARES Act included a package of subsidies for small companies. The PPP, or Paycheck Protection Program, supplied funding for payroll, benefits, and other expenses.

Of course, behind every type of cash lurks a swindle, and the PPP scheme was no exception.

Imposters, posing as government authorities, are utilizing public information about PPP loans to locate, contact, and swindle businesses.

Yes, that is horrible behavior, but our Wake Up 2Day Better Business Bureau segments have taught us that these scammers would go to any length to steal money from people, regardless of the circumstances.

“BBB is hearing that thieves pretending to be the government are threatening businesses that took advantage of the government-funded loan program designed to help small businesses pay their workforce during the COVID-19 crisis,” Cameron Nakashima, a spokesperson for the BBB, stated

Many detailed PPP loan facts, such as who applied, who was approved, and so on, are available for everyone to read online. Unfortunately, the bad guys are also accessing this information to determine which companies obtained loans and read numerous loan details.

“A wealth of information is available. Using merely a zip code, you can see the company name, the date the loan was granted, the loan amount, a breakdown of how the business owner stated the funds will be spent, and more,” Nakashima explained.

Scammers then call these businesses and use all of this information to impersonate government organizations, claim to have an open arrest warrant linked to the investigation of the company’s PPP loan and demand bail or loan payments to “resolve the warrant” and avoid jail time.

Three strategies for business owners to be safe:

  • Know that law enforcement will never contact you by phone, email, or text to demand quick payment or personal information.
  • Allow yourself time to get ahead of your emotions and think clearly. Scammers are efficient because they play on your emotions, convincing you to act before you have had time to consider or verify.
  • Information. It’s critical that you slow down, disconnect, or ignore the notification. Then, to confirm, go to that government agency’s website and phone them directly at a non-emergency number.
  • Be wary of strange payment methods. Scammers will most likely ask you to send dollars or purchase prepaid gift cards to cover the required “fines.” Scammers love to collect money in this manner since it is difficult to track.

Furthermore, you will not be able to receive your money back. If they ask you to “pay your fines” in this manner, it is a clear indication that it is a fraud.

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