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Protect Your Business From COVID-19 Scams

Carla Medrano
October 9, 2020

Financial institutions are raising red flags about suspected fraud surrounding the Small Business Administration’s COVID-19 Economic Injury Disaster Loan (EIDL) program, according to the SBA’s Office of Inspector General.

Nearly 440 financial institutions ranging from local credit unions to major national institutions are alerting the SBA about suspected fraudulent EIDL loan applications. The IG’s office identified $250 million in EIDL loans and advance grants given to potentially ineligible businesses and found $45.6 million in potentially duplicate payments.

Examples of suspicious activity reported by financial institutions include:

Accounts established using stolen identities
Account holders unable to explain origins of deposits or identify business names on loans
Account holders attempting to transfer funds into investment or foreign accounts
Loan deposits being made into accounts with no other account activity that were established remotely just before receiving the loan funds
Account holders attempting to withdraw loan funds in cash or transfer the funds to other newly established accounts
Financial institutions have frozen funds in certain situations and are trying to contact the appropriate department in the SBA to provide information about the borrower and resolve the frozen funds.

How to protect your business

Apply for SBA loans through your lender. All SBA loan applications must go through a preferred lender. The SBA WILL NOT initiate contact asking you to apply for an EIDL loan or any other SBA loan.
Look out for phishing attacks using the SBA logo. These may be attempts to obtain your business’s personally identifiable information.
The presence of an SBA logo on a webpage does not guarantee the information is accurate or endorsed by the SBA. You should cross-reference any information you receive with your lender, or visit www.sba.gov to verify information.
Report any suspected fraud to the Inspector General’s office at 800-767-0385 or online by clicking here.

New scams are popping up every day. Don’t fall for the tricks! Keep your information safe by remaining alert. If you get an inkling of “IRS” tax fraud, don’t hesitate to call us.

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