AG To Small Businesses: Be Wary of Possible Lending Scams
State Attorney General Letitia "Tish" James is warning New York business owners to be on the lookout for lenders and agents who are fraudulently marketing federal stimulus relief loans.
James said she has issued a cease and desist order to one such bad actor: SBA.com, which she says has engaged in deceptive marketing and business practices related to the issuance of Paycheck Protection Program loans.
"Small Business Advice", through its sba.com website, creates the “misleading impression” that it’s part of the U.S. Small Business Administration, which runs the Economic Injury Disaster Loan program and oversees the PPP program, James said. The federal agency’s website is sba.gov.
"It’s imperative that small businesses know about the financial aid that is available and aren’t duped in the process of applying for these lifelines," the AG said in a statement.
Apparently, even U.S. Treasury Secretary Steven Mnuchin got confused and incorrectly directed PPP loan applicants to the wrong website during an April 2 press conference. The White House later corrected the error.
James' office has issued some tips to businesses on how to protect themselves from fraud and abuse at this difficult time.
As of earlier this week, lenders participating in the PPP program are no longer issuing loans because the $349 billion authorized by Congress to support the effort as part of the $2.3 trillion pandemic relief package has run out.
Small business borrowers who believe they may have been defrauded by someone offering, issuing, or servicing a PPP loan, or offered a PPP loan by a lender that does not appear on the SBA’s website as an eligible lender, can file a consumer protection claim with the AG's office or call 1-800-771-7755.