Security & Fraud

Senators Push FTC To Shield SMBs From PPP Scams

The FTC issued refunds in a case involving an immigration scam

A group of senators is asking the Federal Trade Commission (FTC) to take more steps to protect small- to medium-sized business (SMB) owners from scams during the coronavirus pandemic, according to a CNBC report.

Sens. Amy Klobuchar of Minnesota and Elizabeth Warren of Massachusetts, two former Democratic candidates for the presidency, have asked FTC Chairman Joseph Simons to explain how the agency is identifying and preventing scams and assisting victims of the Paycheck Protection Program (PPP).

In a letter to Simons on Wednesday (May 6) 11 senators, led by Klobuchar and Warren, raised concerns about scammers “exploiting” the popular Small Business Administration’s (SBA) PPP designed to keep employees on the payroll. The senators said there are reports of people sending fraudulent SBA loan applications to companies in order to steal personal information.

“Given the seriousness of this issue, we urge the FTC to take action to better inform small businesses about fraud and assist victims in understanding how they can get help and avoid falling victim to exploitation,” the senators wrote.

The lawmakers asked what additional steps the FTC would take to let SMB owners know about deceptive practices, how to prevent them and assist victims, the network reported.

CNBC said the FTC did not immediately respond to a request for comment on the senators’ letter.

The spending bonanza has created opportunities for fraud. PYMNTS reported two men were charged in Rhode Island with fraudulently applying for assistance by making false statements through the PPP.

Last month, PYMNTS reported that COVID-19 has created a playground for cybercriminals. BleepingComputer.com revealed that the Coronavirus Aid, Relief and Economic Security (CARES) Act has triggered the latest round of scams with said tricksters trying to take advantage of vulnerable Americans by sending emails impersonating the SBA’s PPP.

Also last month, DataVisor CEO Yinglian Xie told PYMNTS founder Karen Webster that fraudsters rose to the surface very quickly. These cybercriminals, Xie said, have studied the process and know when SMBs are expecting contact about their loans and even the times of day they are expecting them.

The Better Business Bureau has issued a series of guidelines to protect small businesses from PPP scams.

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NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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