As the COVID-19 upended the business world, employers celebrated when the CARES Act passed, which granted more than $376 billion in small business relief and gave their employees a financial cushion, too. As employers and workers alike were eager to claim their share, scammers were just as delighted for the new opportunities to swindle Americans out of their well-deserved stimulus funds.
The CARES Act offered several financial incentives to help businesses stay afloat, including
- The Paycheck Protection Program for employees of small businesses
- Economic Injury Disaster Loans for small businesses experiencing a loss of revenue due to the pandemic
- The SBA 7(a) Loan Program
In addition to federal relief, small business owners can also seek financial boosts from other sources, including Facebook’s Small Business Grants Program, GoFundMe’s $500 match program, and even local-based funds.
There are legitimate sources of funding out there, but business owners should be aware that there are also plenty of scams floating around, too. And given that some personal information may be required for you to apply for relief, it is important that you are not handing over critical details to just anyone.
Here is a closer look at some of the scams that are targeting small businesses during the pandemic:
Public Health Scams
Businesses know they need to comply with CDC regulations and local directives, which is why public health scams are becoming a threat. Emails and other correspondence that come from reputable sources like the CDC or WHO may prompt you to download something or hand over your social security number, tax ID, or other details. Train your staff not to respond to messages like these and never share critical details, as it could result in malware, phishing, or account breaches.
Government Check Scams
Financial relief is a top concern among small businesses, which is why many fall prey to government check scams. Keep in mind that no federal relief will ask you for payment upfront, nor will the government reach out to you offering relief. Federal funds must be applied for.
Business Email Scams
Email fraud is another common scam. Many times, an email disguised as one coming from the business owner or CEO will ask employees to wire money or purchase gift cards. These are harder to spot in times of uncertainty because your business may be making odd transactions or urgent requests, so a phony email will blend right in.
If you find yourself at the center of a business scam, you do not have to settle for your losses. It is important to report the scam and consult with your legal advisor on the best way to mitigate the scam’s impact on your business. Contact our legal team today to start planning your best path forward.