Nov 03, 2020
The Small Business Association (SBA) issued a report back in July 2020 stating ‘serious concerns’ of potential fraud related to the EIDL Program. The SBA’s inspector general raised red flags about more than $78 billion in aid approved for businesses under the agency’s program — about 37% percent of the total amount distributed — and warned billions might have been fraudulently obtained by individuals taking out loans on behalf of companies.
WVC has received reports of this happening in Northwest Ohio. Fraudsters have taken loans out on behalf of companies and it isn’t until those companies apply for a legitimate new loan or go through a bank review are the fraudulent EIDL loans discovered.
As of today, the Federal Trade Commission has calculated $170 million in fraud losses related to COVID-19 of which roughly $2 million has occurred in Ohio and $3 million in Michigan. Cybercriminals began capitalizing on the ever-changing pandemic from the moment it began. It is unfortunate to hear, but a reality of the world we live in today.
As fraudsters exploit the ongoing pandemic, we wanted to share with you the suggested steps our in-house Risk Services Leader, Tiffany Pollard, recommends should you find yourself in a similar position:
- Work directly with the banking institution which experienced the fraudulent EIDL transaction and inquire if they will provide coverage for credit monitoring; and,
- Review the FTC website with recommendations on what to do when your personally identifiable data has been compromised:
To prevent such fraud, here are some recommendations you can do now:
- Activate credit monitoring at the three credit bureaus for your business and personal credit.
- Work with your banking institution to ensure you are using the available financial transaction monitoring available to detect fraud.
- Ensure you have cybersecurity and identity theft expense reimbursement insurance. Cybersecurity and identity theft insurance can help you pay for expenses associated with resulting losses and provide tools to reduce the risk of additional fraud.
- Complete a Security Assessment by an independent cybersecurity team. This evaluates current information technology systems to identify vulnerabilities and review the dark web for possible user name and password loss. Completing a preventative assessment can give you peace-of-mind knowing you have mitigated vulnerabilities within your network.
Having plans in place before such an issue occurs will enable your business to confidently manage such a tense situation. If you have any questions, please reach out to your WVC Advisor to Tiffany Pollard directly. WVC is here to help you.
Tiffany Pollard, CISA
Risk Services Practice Leader, William Vaughan Company
Tiffany.email@example.com | 419.891.1040