In recent weeks, we have learned of an uptick in fraud cases for businesses who have applied for Paycheck Protection Program (PPP) funds for coronavirus disruption relief. Businesses on the receiving end of this type of fraud have discovered it only after receiving an official document from the SBA via mail informing them of the repayment schedule for Economic Injury Disaster Loan (EIDL) funds they never applied for.
In addition, some business owners have learned their information was stolen only after performing new lien searches with lenders, while others found out through documents being sent through the mail.
In fact, more than 1000 reports have been made to the SBA regarding business owners that are fighting fraudulent Economic Injury Disaster Loan (EIDL) applications taken out in their name based on information that hackers have pulled from PPP applications, and other avenues of information gathering.
The bottom line is this: any applicant of PPP funding could be at risk for these scams and should be on high alert.
4 Crucial Steps for EIDL Fraud Detection
It’s important to know what to do if you suspect unauthorized activity, and actions you can take to deter it.
- Stay Alert: be especially watchful of your mail, emails, and lender communications. If anything seems suspicious, or you receive an official notice for something you did not apply for, report it immediately.
- Notify Lenders: inform your lender (whether you participated in the EIDL program or not) so that they are aware of potentially fraudulent loans. Should the lender identify liens that shouldn’t have been filed, the owner will need to report the fraudulent loan to the SBA.
- Be Proactive: in addition to notifying lenders of your loan program status mentioned above, business owners should closely monitor personal credit reports. We recommend putting a hold/freeze on your credit to help monitor any authorized activity.
- Report Immediately: with the uptick in fraudulent activity, it’s important to report your case immediately to SBA to start an investigation and address the business fraud.
- SBA Customer Service Center: 1-800-659-2955
Should you have additional questions, contact a K·Coe advisor.