The SBA Releases Advice On Avoiding Stimulus Program-Related Fraud

The U.S. Small Business Administration (SBA) has warned the public to be on the lookout for scams related to the stimulus programs offered in response to the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the largest financial assistance bill to date, includes provisions to help small businesses and the SBA reports that fraudsters have already begun targeting small business owners.

The SBA has identified grant fraud, loan fraud and phishing schemes related to the stimulus program:

  • The SBA does not initiate contact on either 7a or Disaster loans or grants. If a business is proactively contacted by someone claiming to be from the SBA, the administration advises them to suspect fraud.
  • If a business is contacted by someone promising to get approval of an SBA loan but requires any payment upfront or offers a high-interest bridge loan in the interim, suspect fraud. SBA limits the fees a broker can charge a borrower to three percent for loans $50,000 or less and two percent for loans $50,000 to $1,000,000 with an additional one-quarter-percent on amounts over $1,000,000. Any attempt to charge more than these fees is inappropriate. If a business has a question about getting a SBA disaster loan, call 800-659-2955 or send an email to disastercustomerservice@sba.gov. If they have questions about other SBA lending products, call SBA’s Answer Desk at 800-827-5722 or send an email to answerdesk@sba.gov.
  • If a business is in the process of applying for an SBA loan and receives email correspondence asking for personally identifiable information (PII), ensure that the referenced application number is consistent with the actual application number. The administration recommends looking out for phishing attacks and scams utilizing the SBA logo. These may be attempts to obtain PII, to obtain personal banking access or to install ransomware or malware on a computer. Any email communication from SBA will come from accounts ending with sba.gov. The presence of an SBA logo on a webpage does not guaranty the information is accurate or endorsed by SBA. The SBA encourages users to cross-reference any information they receive with information available at www.sba.gov.

Report any suspected fraud to OIG’s Hotline at 800-767-0385 or online at www.sba.gov/about-sba/oversight-advocacy/office-inspector-general/office-inspector-general-hotline.

filed under April 2020
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