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In the wake of the COVID-19 pandemic, the Paycheck Protection Program (PPP) served as a critical lifeline for small businesses across the country. Unfortunately, the widespread distribution of PPP funds also created opportunities for fraud — and PPP loan scam attempts continue to target business owners today.

While these scams aren’t new, they are persistent and increasingly sophisticated. Understanding how they work and knowing what to watch for can help protect your business from financial loss and stress.

How PPP Loan Scams Work

Fraudsters often rely on publicly available PPP loan data released by the U.S. Small Business Administration (SBA) in December 2020. This data included business names, addresses, loan amounts, and even banking relationships.

Using this information, scammers may contact business owners pretending to be:

• Banks or financial institutions

• Government agencies

• Law enforcement officials

They often use spoofed phone numbers or email addresses that appear legitimate and create a sense of urgency or fear. Victims may be pressured to share online banking credentials or one-time security codes, giving scammers access to accounts and the ability to initiate unauthorized transactions.

Spotting the Signs of a PPP Loan Scam

Being able to recognize common red flags is one of the best ways to stay protected. Watch out for:

• Unexpected Contact
  Unsolicited calls, emails, or texts claiming issues with your PPP loan or missed court dates.

• Threats of Legal Action
  Messages threatening jail time, fines, or immediate legal consequences.

• Requests for Immediate Payment
  Demands for urgent wire transfers or payments to “resolve” an issue.

• Impersonation Tactics
  Claims of being a government official or law enforcement. Legitimate agencies will not demand payment or sensitive information over the phone or via email.

Steps You Can Take to Protect Yourself

Your vigilance is your strongest defense. Here are steps you can take to help protect your business:

• Do Not Engage
  If you receive a threatening call demanding payment, hang up immediately.

• Verify Independently
  Contact your banker directly using a phone number or email you already have on file — not the contact information provided by the caller or sender.

• Don’t Trust Caller ID
  Phone numbers and email addresses can be spoofed.

• Avoid Clicking Unsolicited Links
  Never click links in unexpected texts or emails.

• Protect Your Login Information
  Never share online banking credentials, passwords, or one-time security codes.

• Report Suspicious Activity Immediately
  If you believe fraud has occurred or your account may be compromised, contact your bank right away.

• Educate Your Team
  Make sure employees know how to spot phishing, spoofing, and scam attempts.

Stay Alert, Stay Safe

PPP loan scams remain a real threat, especially for businesses that participated in relief programs. By staying informed and cautious, you can help safeguard your business, finances, and peace of mind.

For additional information about scams impacting small businesses, visit the U.S. Small Business Administration website.