Hello, and welcome to a special edition of CoBank’s Fraud Wise, helping you avoid becoming a victim of fraud.
Unfortunately, fraud never sleeps, even during a pandemic.
The Small Business Administration recently warned about a large-scale impersonation scam involving a specific type of loan related to COVID-19 pandemic relief. There are serious concerns of potential fraud in the Economic Injury Disaster Loan Program, also known as EIDL.
Banks receiving EIDL deposits have reported more than 5,000 instances of suspected impersonation fraud. Fraudsters apparently have obtained advances or loan funds using the names of real companies.
The EIDL program generally provides small businesses and nonprofits with low-interest loans of up to 2 million dollars -- that can provide vital economic support to help overcome the temporary loss of revenue resulting from COVID-19.
The EIDL Program is separate from the Paycheck Protection Program loans that are made by banks -- including CoBank -- and guaranteed by the SBA.
Although CoBank is not involved in the EIDL program in any way, we encourage ALL of our customers to check with the SBA to determine whether the agency is showing them as an EIDL borrower—whether you’ve taken out an EIDL loan or not.
You can download all EIDL data from the SBA.gov website. If you can’t find the download link on the website, contact your CoBank relationship manager for more details.
Once you’ve downloaded the files, search for your company’s name.
If your company’s name appears on the list but you DIDN’T receive an EIDL loan, this might be a case of fraud. You should contact the SBA Office of the Inspector General immediately by calling 1-800-767-0385. That’s 1-800-767-0385. In addition, consider contacting your accountant, auditor, attorney, or other professionals to make them aware of the issue.
So how might this impersonation fraud affect your company? Well, there is a relationship between EIDL advances and PPP loan forgiveness. As a result, if you have a PPP loan from CoBank or another lender, the fraud could potentially slow down the processing time for a loan forgiveness application.
Unless the matter is addressed and corrected with the SBA, fraudulent advances could also reduce the amount of the loan that is forgiven.
If you discover a fraudulent EIDL loan under your company’s name, notify your lender immediately.
Here are a few tips for protecting yourself from fraud.
Never give personal or business information to anyone you have not proactively contacted using a phone number or email address that you are confident is accurate. Teach your employees to do the same.
In addition, review business credit reports from the three major credit bureaus on a regular basis to ensure that no unauthorized items are present.
This has been a special edition of CoBank’s Fraud Wise, helping you protect against fraud. For more information about these and other types of fraud, visit cobank.com/fraud.