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Scam Targets PPP Loan Recipients: What You Need To Know

Cyber ​​attack alert on laptop. Cyber ​​attack on computer network. Virus, spyware, malware or malicious software. Businessman background.

Credit cards aren’t the only financial products targeted by scammers. In recent months, a growing scam has emerged, specifically targeting businesses and individuals who received Paycheck Protection Program (PPP) loans. This article explains how PPP loan scams work, how to recognize warning signs, and what steps recipients can take to help reduce their vulnerability. Arthur State Bank is committed to keeping South Carolina customers informed and aware of financial fraud.

What Is PPP Loan Fraud?

In a PPP loan fraud, scammers use false claims, impersonation, or misleading communication to obtain information or access to funds. These scams may occur through phone calls, text messages, emails, or even mailed documents that appear official. Scammers may impersonate banks, government agencies, or law enforcement to deceive individuals or businesses. Using business names, lenders, loan amounts, and other information obtained from public records, fraudsters craft convincing messages designed to gain a PPP loan recipient’s trust.

How a PPP Loan Scam Works

One common method is caller ID spoofing, which allows fraudsters to manipulate phone numbers so a call appears to come from a legitimate bank. A PPP loan scam call may also be followed by fake bank messages or emails to increase credibility. 

The goal of PPP scamming is to persuade victims to share sensitive information, such as online banking usernames and one-time security codes. Victims may be directed to click a link to “verify” or “secure” their account, but in actuality, it gives the scammer access. Once account access is obtained, scammers may attempt to move funds into their own accounts, which are difficult to trace.

Warning Signs of a PPP Loan Scam

PPP loan recipients should be cautious of any unexpected communication related to their loan. Scammers often rely on urgency and pressure to prompt quick action before a recipient has time to verify the message. Common red flags include:

  • Urgent requests for action or threats of consequences
  • Requests for passwords, security codes, or login credentials
  • Messages claiming problems with forgiveness or compliance
  • Calls, texts, or emails that pressure you to act immediately

If a message feels rushed, alarming, or out of character for your bank, it may be a sign of a scam and should be verified independently.

How To Protect Yourself From PPP Loan Scams

Reducing your vulnerability starts with awareness and careful decision-making. Taking the following steps may help protect your accounts and personal information:

  • Verify the caller’s identity: If a call seems suspicious, hang up and contact your bank directly. Use the phone number on the official website or mobile app. Never call back the number that contacted you.
  • Never click on links: Avoid clicking on unsolicited or unexpected links sent by text or email. If a mailed document includes a website address, do not visit the site unless you have independently verified it.
  • Do not share sensitive information: Know your bank’s policies and remember that most banks will never ask for your account password, security tokens, full 16-digit card number, three-digit CVV code from the back of your card, or your full Social Security number over the phone.
  • Enable multi-factor authentication: This added security step requires more than one form of verification when logging into your account, which can help reduce the likelihood of unauthorized access if login details are compromised.
  • Educate others: Anyone who answers your home or business phone, or uses a shared device, should understand information gathering and spoofing tactics.

How To Report PPP Loan Fraud

If you believe you’ve been contacted by scammers or may have shared information, it’s important to act quickly. Contact your lender right away so protective steps can be taken on your account. Always call the bank directly using an official number, like the one on the back of your card. Your bank may provide additional reporting steps if necessary.

Reporting PPP loan fraud promptly helps protect not only your finances but also others who may be targeted by similar scams. It allows banks and authorities to respond more quickly and may help limit the spread of fraudulent activity.

Stay Alert and Stay Protected

Fraudsters continue to find new ways to target PPP loan recipients, making awareness and vigilance more important than ever. By understanding how these scams operate and knowing what steps to take, you can reduce the risk of costly losses. Staying informed is one of the strongest tools you have to protect your business and your finances.

Proudly serving South Carolina since 1933, Arthur State Bank offers accounts and services to meet a variety of financial needs. To help you achieve all your financial goals, the bank offers in-person service as well as a range of convenient digital solutions. To learn how Arthur State Bank can help you with banking needs from checking and savings to retirement accounts, mortgages, and other personal loans, visit arthurstatebank.com.

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AnnualCreditReport.com is the only source for free credit reports authorized by the federal government. Every 12 months, you can get a free copy of your credit report from each agency.

Your credit report has your credit history for all of your credit accounts as well as any credit inquiries and public record court information such as collections. In addition, the report provides personally identifiable information such as your name, address, and employment.

Be sure to carefully review all three reports to identify any problem areas that you may need to clean up prior to applying for a mortgage. If there is any incorrect information, follow the reporting agency’s rules to correct it or add a notation to the report to explain the situation.

Your FICO Score is a score combines data from several areas include payment history, the amount owed, length of credit history, new accounts. Many lenders use this score as a guide. This score is not provided as part of the free annual credit report.

Learn more about how your credit score impacts your ability to secure a loan.

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Primary considerations for setting your housing budget require an assessment of your income, debt and current savings for the down payment on the home. The following are generally recommended guidelines; however, you should meet with an Arthur State Bank lender to get personalized mortgage information.

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The pre-qualification/pre-approval letter is included with any offer you make on a house to inform the seller that you have met with a mortgage lender and you are prepared to make an offer. The letter states that based on certain assumptions, the bank is prepared to lend you up to a specified amount of money for a home mortgage.

When choosing a loan officer, we recommend going local to work with someone who understands your community’s real estate market. This blog on first-time home purchases includes questions to ask your lender that may be helpful when preparing for your meeting.

Helpful Resources:

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When a house is sold, the seller typically pays real estate commission to both the listing agent and the selling agent. It is extremely beneficial for the buyer to use their own real estate agent. Loan officers can often recommend selling agents in the area; ask your officer about realtor referrals when discussing your loan.

A good realtor will know the local market and can help you find an ideal home based on your budget, location and desired features. During your search, understand that you will most likely need to compromise on some items, so it’s important to identify your critical needs versus your wants.

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Couple searching online for a home

Additionally, when you start with the house search and work backwards, homes can often go off the market while you’re completing steps 1-4. While browsing homes immediately can be tempting, we recommend following these steps in order so that, once you find your dream home, you’ll be well-positioned to take action immediately.

When you find the home you want and you think you are ready to put an offer on it, you will want to make sure you have all the information you need to make a solid offer.

  • Evaluate the neighborhood.
  • Drive by the house at different times of the day.
  • Examine how other houses in the neighborhood are maintained.
  • Consider any potential traffic or other disruptive noise.
  • Is there ample parking for you and visitors?
  • Read the details in any Homeowner Association agreements (HOA fees and rules).

Make sure to do a preliminary check of house details:

  • Check the water:
  • Does it have good pressure?
  • How long does it take to get the water hot?
  • Is it well water or city water?
  • Turn light switches on and off.
  • Open and close doors and windows to make sure they work properly.
  • Review previous utility bill expenses.
  • Consider the property tax bill.

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Family meeting with realtor at new house

When writing an offer contract, be sure to pay attention to all of the details.

Offer Price:

Your agent should do a market analysis that pulls data on recently sold comparable houses. The best comparisons will come from the same neighborhood.

If you are asking for the seller to pay some of the closing costs, remember that this cost plus the sales commission determines the net amount you are offering the seller for the house.

Work with your agent on your negotiation strategy. There are many things to consider, such as how badly you want this particular house, whether it is a buyer’s or seller’s market and an assessment of the seller’s motivation to get the property sold.

There isn’t one best strategy.

Be sure to document in writing everything you want included with the house, such as appliances, etc. Your agent should guide you through the contract step-by-step.

Contingencies:

  • Home inspection.
  • Mortgage.
  • Final walk through (24 hours prior to closing).

Proposed closing date. Typically, this is 30-45 days from an accepted offer.

A good-faith deposit is required for the offer. This is typically between 1-10% of the purchase price of the house. The deposit is kept in escrow until closing and the money is applied to the purchase price of the house at closing. If the house does not close due to one of the contingency clauses, the buyer receives their money back. However, if the buyer decides not to close on the property, the seller may get the deposit money.

Attach your pre-approval letter to the offer.

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Two people in professional meeting

The clock starts ticking for everything documented in the contract, including mortgage application, inspections and closing date.

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Woman advising other woman on mortgage application

You will need to decide which mortgage to select prior to the application.

Plan for the following potential fees:

  • Application fee (many banks and mortgage companies charge an application fee; however, there is not an application fee at Arthur State Bank).
  • Credit check.
  • Appraisal (may be paid at closing).
  • Loan origination fee (paid at closing).

Once you have approval for your loan, make sure you don’t change anything that will impact the status of your mortgage. Banks do a final check on credit and jobs just prior to closing, so now is not the time to change jobs or make another purchase on credit such as a car or furniture.

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Home inspector going over findings with home owner

Depending on the size of the house, an inspection can cost on average between $300 to $1000.

Many real estate contracts specify how problems uncovered in the inspection will be resolved, up to a certain dollar amount. Should necessary repairs exceed that amount, the buyer has the option to cancel the contract without penalty and receive their deposit money back. Another option is for the buyer and seller to renegotiate who will pay for additional repairs.

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Woman happily holding keys to her new home
  • Homeowner’s insurance is required by the lender prior to closing on the loan.
  • Turn on utilities in your name, effective the closing date.
  • Change your address with the U.S. Postal Service.
    • Make moving arrangements.

Three days prior to closing:

  • You should receive your final Closing Disclosure from the closing agency. The final Closing Disclosure shows a column for the seller and a column for the buyer. All closing charges and credits for both the seller and the buyer are documented in the closing statement.
  • Review the closing statement for accuracy prior to coming to closing.
  • The final amount in the buyer’s column shows you the amount of money you need to pay at closing.

The closing office will provide specific payment instructions. Closing funds have become recent targets for cybercriminals. If you are asked to use a wire transfer, call the office and ask to speak to someone you have been working with to double-check the instructions.

Closing day:

In South Carolina, the closing will usually take place at the attorney’s office. Everyone signing for the mortgage must be present to sign the closing paperwork. Make sure you bring the following:

  • Cashier’s check or proof of payment for wire transfer.
  • Driver’s license.
  • Checkbook, just in case there are any additional items that were not on the closing statement.

Be sure to understand this information:

  • How and when you will pay:
  • Your mortgage.
  • Your property taxes.
  • Your homeowner’s insurance.
  • Any HOA dues.
  • Who to call with any questions.

The best practice is to go through the homebuyer’s roadmap in this sequence. However, if you jumped ahead early in your journey, just circle back to address the steps you missed.

Arthur State Bank’s loan officers are closely tapped into local real estate markets and experts at helping clients get what they need on terms that work for them. We also offer mortgage specials for first-time homebuyers.

To start planning your journey to your dream home, try out our mortgage calculator. If you’re ready to talk to a loan officer, contact Arthur State Bank to request personalized mortgage information today. Don’t forget to ask about our first-time homebuyer offer.

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