COVID-19 ALERT: Beware of Scams

April 15, 2020
COVID-19 ALERT: Beware of Scams
by Jennifer M. Spitz, Shareholder

During the COVID-19 pandemic, there are many examples of altruism and community support.  Unfortunately, though, not everyone has good intentions.  Some people use this difficult time to try to defraud others.  Below are some examples to watch out for.

IRS Scams

Many Americans are anxious to receive their COVID-19 economic impact payments. Scammers contact people via email, phone calls, or social media to try to get them to “verify” the information needed for the money to be deposited.  This stolen information will be used later to as part of identity theft schemes, such as to file false tax returns.  The false tax returns claim a refund that is then sent to the scammer.

The IRS has issued a warning about a recent surge in these types of scams.  In this warning, the IRS states that it “will deposit your economic impact payment into the direct deposit account you previously provided on your tax return (or, in the alternative, send you a paper check). The IRS will not call and ask you to verify your payment details. Do not give out your bank account, debit account, or PayPal account information – even if someone claims it is necessary to get your economic impact payment.”

Loan Scams

The Paycheck Protection Program (PPP) will fund $350 billion in loans backed by the U.S. Small Business Administration.  With so much money at stake, these loans are prime targets for scammers.

The Treasury Department advises to beware of calls, emails, or other communications claiming to be from the Treasury Department offering you grants or stimulus payments in exchange for personal financial information, or an advance fee.  Do not respond. Scammers could use this information to apply for a loan on your behalf, and you could be on the hook for paying it back.  Also, if a scammer applies for a loan for you, then you may not be able to obtain your own PPP loan.

If you have applied for a loan, be cautious with calls or emails purportedly from your bank asking for additional information.  Verify that this request is indeed from your bank, and not from a scammer.  If you provide the information to a scammer, you could be giving that person sensitive financial information, including employees’ social security numbers.

Attorneys in the Business and Transaction Group at Lyons Gaddis are available to advise you in relation to these programs and other COVID-19 related matters impacting you.