By Frank Ciambrone
In light of COVID-19, scams against businesses by bad actors continue to occur. We understand that in this time of uncertainty and turmoil it may be difficult to keep a clear head as you’re looking to help your employees and your business. To ensure that you and your business are prepared and protected against potential bad actors out to take advantage of unsuspecting citizens when guards may be down more than usual, we’ve outlined a few possible scams you should be aware of.
Paycheck Protection Plan Business Scams
The recently passed CARES Act provided nearly $350 billion to assist small businesses with a new lending program to meet payroll obligations known as the Paycheck Protection Program (“PPP”). This has also given bad actors an additional channel they can use to reach out and attempt to take advantage of your business.
Educating yourself can be your strongest line of defense. Familiarizing yourself with the details of the Paycheck Protection Program will go a long way towards helping you safeguard your business. For example, knowing that you must first apply to qualify to receive the loan for your business can save you from a scammer who assumes you aren’t aware of that fact or that you already have applied when, in fact, you haven’t. Also, not all businesses will qualify as eligible borrowers so being in-the-know about these types of PPP requirements can further shield you from falling prey to a scam.
Some possible COVID-19 business scams around the Paycheck Protection Plan bad actors may attempt to stage include:
- Communicating via phone, email, or text with a message that looks like it’s coming from a bank or Federal representative asking you to verify your business’ bank account information in order to qualify for the loan;
- Sending a communication that you’ve qualified for a PPP loan and that they’ll speed up the process to give you financial relief for your business in exchange for business and/or personal information (even if you haven’t applied for the loan); or
- Offering a special bonus payment above the loan cap or offering a PPP loan with 100% forgiveness without requiring your business to submit a request for forgiveness to the lender.
The IRS has warned that if you receive an unsolicited phone call, email, text message, or social media communication, asking you to provide or verify your business’ financial information, it should send up a red flag. If you receive an email asking for this information, it’s imperative you don’t open or click on any links or attachments inside the email. Additional red flags you should be aware of include:
- A call demanding immediate payment of business taxes owed; Payment could be requested via credit/debit card or in a non-traditional format such as using a gift card or pre-paid card;
- An email from the IRS asking you to click on a link to complete a wire transfer to pay your business taxes;
- An offer to provide business tax rebates or business tax credit payments via direct deposit if you provide your business’s bank account information; or
- The receipt of a fake check asking a representative from your business to call or visit a webpage to verify information in order to be able to cash the check.
Additional COVID-19 Scams
While this list is not exhaustive, some additional COVID-19-related scams your business should be on the lookout for include those involving business emails, supplies, robocalls, data, I.T., and public health. Be sure to keep an eye out for the following red flags if you receive a communication about these scams:
- An unusual amount of urgency in the communication you received;
- A communication from someone claiming to be from a business or account you’re working with, asking for something different than you’d already agreed upon; or
- An internal employee email request asking you to modify account or payment information.
If you receive a communication with a request that seems unusual, it probably is. If you have any uncertainty, follow up with your I.T. department to check the authenticity of the communication.
Now, more than ever, is a time to keep your guard up when it comes to scams against your business as COVID-19 has made us more vulnerable than usual. If you’re vigilant in safeguarding your business and take a breath before acting on a potential scam, you can save your business from more difficulties, going forward. It’s always better to err on the side of being overcautious to ensure something isn’t a scam.
If you believe you or your business has been part of a fraudulent COVID-19 incident, you should report the incident to the Federal Trade Commission, here: https://www.ftccomplaintassistant.gov/. If the incident is IRS-related, please report it here: https://www.irs.gov/privacy-disclosure/report-phishing.