How to Protect Your Business From COVID-19 Scams

Business Planning

By Larry Zelvin

Unfortunately, it is during times of great economic, business, and social uncertainty that we see scams and fraud proliferate and prey on our vulnerabilities. In the age of COVID-19, cyber scams have increased in both frequency and duplicity. Global cyber security experts report a 600 to 800% increase in the number of cyber attacks over the past few weeks, and tens of thousands of COVID-19 related fraudulent websites and mobile applications have emerged.

Scammers see a much larger pool of potentially desperate prey, with one group particularly vulnerable: small businesses.

Small businesses face challenges like never before, as forces beyond their control upend the economy and their ability to serve existing customers and grow their companies. These owners are making critical decisions every day: Should we reopen when the state or city lifts restrictions? How will we keep our employees, our customers, and ourselves safe when we do open? How do we apply for financial hardship programs and relief from the CARES Act?

Amid all of these challenges and weighty decisions is where scammers strike, wreaking havoc when anxiety is already at an all-time high. It is more crucial than ever that small business owners and entrepreneurs remain vigilant and safeguard themselves against preventable scam threats.

Here is what you need to know.

Scrutinize the source of the communication

Remember the age-old axiom: “If it sounds too good to be true, then it probably is.” This is especially true when it concerns offers of “free government grants” and emails promising “fast and guaranteed approval for your loan today.”

Scammers are posing as financial services companies, legal firms, credit bureaus, and more. Some even pretend to be government agencies such as the Small Business Administration (SBA). Business leaders need to routinely validate the source of any email or communication before doing anything else.

As a point of reference, many organizations, including the SBA, are transparent on the guidelines dictating how they communicate with small businesses. For example, the SBA will not contact small businesses directly to apply for the Payment Protection Program under the CARES Act, nor will the SBA text or communicate with businesses via social media. If you receive communication from someone claiming to be with the SBA who does not have an email ending in, or from someone promising an SBA loan approval contingent on the payment of a high, upfront fee, contact the SBA Office of Inspector General Hotline at 1-800-767-0385.

Be selective when sharing personal and business information

Did you know that scammers can make headway with only a few pieces of personal or business data? They can fraudulently apply for grants or loans on behalf of your company, contact your customers or employees pretending to be a company official seeking additional information for business reasons, or exploit the new work-from-home environment to request that you invoice to a new bank account—potentially overseas.

Do your research and make sure you not only communicate how you will contact your customers and employees, but also develop a quick action plan for if these attacks occur at your company.

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Webinar registration shouldn’t require extensive personal or business data

There are a variety of informative webinars for small businesses that offer advice on how to weather the pandemic. But a webinar registration shouldn’t require extensive identifying information beyond your name, company and email. Registrations asking for more could be a sign of someone trying to obtain information to commit fraud.

Also, be skeptical of webinars that promise small businesses assistance obtaining loans that are contingent on a significant financial payment. Even if the offer sounds helpful, asking for significant fees is a sign of a scam.

Unexpected credit score changes are a red flag

Just like you would for your personal credit, make a habit of monitoring your business credit. Unexpected changes in your business credit score could mean that someone took out a loan pretending to be you or your company. If you believe this is the case, contact any one of the three national credit bureaus (Equifax, Experian and TransUnion) right away.

Quick action will prevent further damage to your credit and lead to a much quicker resolution than if you wait until someone contacts you with bad news.

Staying organized and up to date keeps your business safe

Now more than ever, financial and administrative housekeeping is critical. Keep all emails and documents related to your grant and loan applications well-organized and in a secure, locked (virtual or physical) location. This degree of preparation will facilitate locating and tracking application information, as well as expedite identifying and reporting fraud should it occur.

In addition to keeping your communications organized, it is important to ensure devices and application software programs are up-to-date. Software releases and product updates will often include security fixes that can ultimately help protect you against questionable online activity.

However, be mindful of how those updates and requests are delivered to you. If the request for a software update comes from a suspect email address or through a “pop-up” message that directs you to an unknown or unfamiliar website, then it may be fraudulent.

Fast action could mean faster recovery of lost funds

Even the most skeptical individuals and business owners can make mistakes that open them up to a scam. Beyond flagging changes in your credit score to the credit bureaus, it is important that you immediately reach out to your financial institution if you suspect that you or your business are victims of a cyber scam. In most cases, the faster the issue is detected, the higher the probability is that lost funds can be recovered. Your bank can also provide guidance on which authorities to report the scam to if necessary.

Stay vigilant against scams

As you navigate your business through these extraordinarily challenging times, you are embodying the spirit and grit of American entrepreneurship and small business ownership. Even with all that you’re facing, ensure you remain hyper-vigilant and attentive to the tricks of unscrupulous operators.

Wishing you the best in business and health!

RELATED: Are You at Risk From a Cyber Attack? Here’s Why Your Business Needs a Cybersecurity Plan

About the Author

Post by: Larry Zelvin

Larry Zelvin is the Head of the Financial Crimes Unit at BMO Financial Group. He was previously the Global Head of Cybersecurity at Citigroup, led the National Cybersecurity and Communications Integration Center at the U.S. Department of Homeland Security, and is a retired U.S. Navy Captain who served at both the White House and the Pentagon.

Company: BMO Financial Group
Connect with me on Facebook, Twitter, and LinkedIn.

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