BBB Scam Alert: COVID-19 Relief Scams Target Small Business Owners
Better Business Bureau • January 14, 2021
With the new United States' COVID-19 relief package rolling out, scam artists are at it again! This time, scammers target small businesses, claiming they are missing out on pandemic relief funding they’ve never even heard of. Watch out for offers of free money – that come at a cost.
How the Scam Works
You receive a call, email, or social media message directed to you as a business owner or bookkeeper. It seems to come from a legitimate business or organization. The person you communicate with asks if your business is taking advantage of a COVID-19 relief package or government grant you are unaware of. When you tell them you aren’t, they offer to sign you up right away. In fact, since you didn’t know you should be receiving these funds, they already owe you hundreds or even thousands of dollars. Scammers may then ask you to pay a processing or delivery fee to receive your relief funds. Unfortunately, once they get your “processing fee,” they will disappear for good.
Sometimes these offers appear to come from someone you trust. Scammers are either hacking social media accounts or creating separate, lookalike profiles by stealing photos and personal information.
One business owner reported, “I was contacted by my actual bookkeeper, who I am friends with on Facebook. She told me to apply for this grant for small businesses that had suffered during the pandemic." The business owner clicked through to the website and filled out a form. Then, they got a text message confirming the loan. There was one problem: “You had to put up a certain amount of money as a processing fee to get the grant.”
How to Avoid COVID-19 Relief Scams
- Never pay money for “free money.” If anyone claims you can receive money for free by paying a fee, don’t believe them. This is a common scam tactic.
- Understand government grants. If your business is awarded a government grant, the government won’t ask you to pay fees to receive it. Before you believe something a stranger tells you about getting a grant, check the official list of all U.S. federal grant-making agencies at Grants.gov.
- Double-check the claims before you sign up. If an organization offers you a grant or relief funds, get to know them before you agree to anything. Take a close look at their website and read consumer reviews. If you think you might be dealing with an imposter, find the official contact information and call the company to make sure the offer is legitimate.
- Be careful, even if the information comes from a friend. Even if a close friend or business associate you trust sent you the information regarding a grant or COVID-19 relief, make sure the claims are real before you get involved. Social media accounts can be hacked, and con artists may be posing as your friend.
For More Information
Federal Trade Commission (FTC) warning on small business scams related to COVID-19.
To learn more about government scams, visit BBB.org/GrantScam. To avoid scams related to COVID-19, see BBB Tips on COVID-19 (coronavirus).
It’s always best to do business with companies who adhere to the BBB Standards for Trust. Read more about BBB's Accreditation Standards. Find out how to Get BBB Accredited.
Executive Director David Cleveland has named Luke Kimbrough as the new Regional Lending Manager for the East Texas Council of Governments (ETCOG). In this role, Kimbrough will oversee the day-to-day operations of the East Texas Regional Development Company’s (ETRDC) small business loan programs. He will work closely with the ETRDC Board, manage financial and administrative services, and ensure the program follows all state and federal guidelines. Kimbrough brings with them more than seven years of experience in banking and employee benefits. Before accepting this position, Kimbrough served as CEO of the Banking Center at Citizens Bank in Gladewater. His previous roles include Vice President at First National Bank of Hughes Springs in Liberty City, Benefits Consultant for Colonial Life in Longview, and Branch Manager for Regions Bank in Kilgore. Before his banking career, Mr. Kimbrough served for several years as the Director of Public Information and Regional Services at ETCOG. “It is a great pleasure for me to welcome Luke back to the ETCOG Family! His exceptional work in the banking community for many years position him for even greater success with our ETRDC Business Lending Programs. I am glad he is back and am even more excited to see the steady growth and expansion of one of our most important economic development programs that will undoubtedly occur under his leadership!” said Executive Director David Cleveland. “I am excited to come back to ETCOG and the East Texas Regional Development Company,” said Kimbrough. “Spending the last decade in banking, I have gained much more experience in financial analysis and commercial lending. There is a lot of work ahead to help the businesses and economy of East Texas.” The ETRDC is a nonprofit organization that is certified and regulated by the U.S. Small Business Administration. Its main purpose is to support local economic development by helping small businesses access long-term, fixed-rate financing. ETRDC offers financing through the SBA 504 Loan Program and Chapman Loan Program.
The East Texas Regional Development Company will sponsor an East Texas Lenders Roundtable hosted by UT Tyler-Longview Small Business Development Center (SBDC) and the Small Business Administration to discuss SBA 7a loans and 504 lending basics. Expert panelists will discuss various loan programs and resources to help businesses increase their portfolios and obtain financing.
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