The Federal Trade Commission (“FTC”) has issued an alert cautioning small business owners who apply for Paycheck Protection Program (PPP) loans to guard themselves against predatory and fraudulent tactics from bad actors looking to take advantage of vulnerable borrowers.
According to the alert, these bad actors are actively seeking to lure small business owners to apply for the wrong program via false claims of affiliation with the Small Business Administration.
One such alleged bad actor, Ponte Investments LLC, promoted an “SBA Loan Program” via a website, e-mail, and cold-call marketing campaign, falsely claiming to be a representative of the SBA working with the business’s bank and urging the business owner to apply for a PPP loan right away.
The Frankowski Firm likewise urges borrowers to be on the lookout for banks who negligently manage customer applications or give preferential treatment to certain businesses.
The FTC issued the following tips:
- If you get an email that looks like it’s from the SBA or your bank, don’t click on any links. Instead, go directly to the organization’s website for information.
- The government will not ask you to pay upfront and it won’t call to ask for your Social Security, bank account, or credit card number.
- Be cautious about companies that offer to expedite or facilitate your ability to get PPP loans. If you’re considering using an online provider or lender, stick with those you already know and trust. Be wary of companies you’ve never heard of or that call or send you emails out of the blue.