Dear Neighbor, 

As you may know, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provided $2 trillion in financial assistance to American families, workers, and small businesses. A major component of this legislation is the emergency financial assistance it made available to small businesses in the form of loans, grants, and debt relief, and to families and individuals in the form of economic impact payments.

As the number of loan applications and direct payments increases, so too does their potential to become targets for scammers. These scammers want to take advantage of innocent people who may be vulnerable due to their current economic situation, and it’s important you are equipped to identify and avoid them.

Below are some of the ways to detect fraudulent behavior, possible scams, and how to protect yourself and your personal information. There are a few schemes in particular that we want to make sure you are aware of.

How to Spot Potential Scams and Fraud Schemes:

Small Business Administration (SBA)

Grants:

• The SBA does not initiate contact on either 7a or Disaster loans or grants.  If you are proactively contacted by someone claiming to be from the SBA, suspect fraud.

Loans:

• If you are contacted by someone promising to get approval of an SBA loan but requires any payment up front or offers a high interest bridge loan in the interim, suspect fraud.
  
• SBA limits the fees a broker can charge a borrower to 3% for loans $50,000 or less and 2% for loans $50,000 to $1,000,000 with an additional ¼% on amounts over $1,000,000.  Any attempt to charge more than these fees is inappropriate.

Phishing:

• If you are in the process of applying for an SBA loan and receive email correspondence asking for PII, ensure that the referenced application number is consistent with the actual application number.
  
• Look out for phishing attacks/scams utilizing the SBA logo.  These may be attempts to obtain your personally identifiable information (PII), to obtain personal banking access, or to install ransomware/malware on your computer.
  
• Any email communication from SBA will come from accounts ending with sba.gov.
  
• The presence of an SBA logo on a webpage does not guarantee the information is accurate or endorsed by SBA.  Please cross-reference any information you receive with information available at www.sba.gov.

For more information from the SBA, please click here. And if you suspect fraudulent activity, please report it to OIG’s Hotline at 800-767-0385 or online.

Internal Revenue Service (IRS)

In order to avoid falling victim to fraudulent individuals either impersonating or claiming to represent the IRS, the Treasury Inspector General for Tax Administration offers the following tips to taxpayers:

• The IRS will generally first contact people by mail - not by phone - about tax related matters.

• If the IRS does contact you by telephone, they will not insist on any pre-payment using an iTunes card, gift card, prepaid debit card, money order, or wire transfer, in order to receive economic impact payments.

• The IRS will also never request personal or financial information by e-mail, text, letters, or any social media.

If you do receive a call or e-mail from someone claiming to be with the IRS asking for a pre-payment or for your personal or financial information in order to receive economic impact payments connected with the coronavirus pandemic, please submit a Coronavirus Scam Report.

Please take care of yourselves and each other, and remember that my office is here to help. Be sure to visit the COVID-19 page on my website for more information and resources. If you have any questions or concerns, or if you need assistance, please don't hesitate to call us at (703) 256-3071.

Sincerely,

Gerald E. Connolly
Member of Congress