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Fake Loan Phishing Scam Targets Small Businesses

Last year was particularly difficult for small businesses. Statewide stay-at-home orders, gathering limitations, and forced closures hammered bottom lines throughout 2020, in some cases causing them to shutter their doors permanently. Making matters worse, small business owners had to contend with a raft of COVID-related scams.

The Federal Trade Commission this month announced yet another new phishing scam, and this one specifically targets struggling small businesses. “It starts with an email that claims to come from the ‘Small Business Administration Office of Disaster Assistance,’” the FTC explains. “It says you’re eligible for a loan of up to $250,000 and asks for personal information like birth date and Social Security number.”

Knowing the specifics of this particular scam can help protect you and your business clients from this particular email scam, but learning the common signs of phishing scams will help you develop an effect “scam radar.” That’s why the FTC outlines three clues that any email, message, or phone call might be a scam:

  • It’s an unsolicited or unexpected message from a government agency
  • It advertises automatic eligibility for a loan
  • It requests personal information, like date of birth and Social Security Number

Unfortunately, fake loan fraud isn’t limited to your inbox. The FTC says that small businesses are routinely targeted with fake websites and scammers impersonating debt collectors. Even worse, the agency reports that some small business owners have been victims of a sites “pretending to be part of the SBA’s Economic Injury Disaster Loan program,” and others have been receiving calls about “[repaying] loans they never took out.” These individuals, the agency says, probably had a loan “illegally applied for … in their name.”

To help those affected small businesses protect themselves from financial harm, the FTC suggests taking three steps: pulling a credit report, using trusted sources to find loans, and reviewing possible lenders before applying for a loan.

Due to the sheer volume of personal information that’s now readily available online—whether due to having been posted on social media or stolen by identity thieves—it’s probably a good idea to regularly take the FTC’s advice prior to any loan application.

For more information, check out the full FTC blog (link below).

Source: Target for new COVID scam: Small business owners

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