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PPP Loan Recipients Targeted by Fraudsters

Don't Fall for the Phony Call: PPP Loan Recipients Targeted by Fraudsters

The recovery journey for many small businesses has been challenging, and now, a new threat is emerging. A new wave of scams is targeting companies that received funds through the Paycheck Protection Program (PPP). Banks nationwide are reporting an increase in attempts by fraudsters to impersonate bank employees by using publicly available PPP loan data to obtain online banking credentials.

 

Here’s how the PPP scam works and what you can do. In addition, we’ll look at other new, AI-fueled fraud attempts targeting businesses today.

How the PPP Loan Recipient Scam Works:

Scammers pose as your bank, often spoofing the bank’s phone number to appear legitimate. They contact PPP loan recipients claiming to need to verify account details, assist with loan matters, or even help you stop fraudulent ACH or Wire transactions. They then attempt to trick you into providing your online banking user ID, password, and one-time security codes.

With this information, they gain unauthorized access to your account and can quickly initiate fraudulent transfers.

Red Flags to Watch For:

  • Unsolicited calls or messages claiming to be from your bank.
  • Requests for your online banking credentials or security codes. Your bank will NEVER ask for this information over the phone.
  • Inquiries about payments to individuals.
  • A caller who is overly helpful or aggressive and they may even use a legitimate bank employee’s name to build false trust.

The AI-Powered Threat Landscape: Other Frauds to Watch

While the PPP scam relies on social engineering, many newer attacks are turbo-charged by Artificial Intelligence, making them harder to detect. These sophisticated frauds aim to exploit trust and leverage technology to mimic trusted sources:

AI-Powered Business Email Compromise (BEC) and Phishing

Generative AI tools are making phishing emails much more convincing.

  • How it works: Attackers use AI to craft grammatically perfect emails that match a company’s tone and feel highly personalized. They often impersonate a senior executive (“CEO Fraud”) or a vendor (“Vendor Fraud”), asking a finance department employee to make an urgent wire transfer or change a vendor’s bank account details for a legitimate-looking invoice. The convincing language and perfect timing (often around a known payment cycle) bypass traditional filters and human suspicion.

Deepfake Voice Cloning Scams

Here is an evolution of vishing (voice phishing).

  • How it works: Fraudsters use minimal voice samples (sometimes just seconds of audio from public videos or a voicemail) to create an AI-cloned voice of an executive, key vendor, or even a relative. They call an employee, often creating a high-pressure scenario (“I’m in a conference and need you to transfer funds immediately to this new account”). Because the voice sounds exactly like the person they know, the employee can feel pressured to act without independent verification. Multi-million-dollar losses have resulted from this type of scam.

Deepfake Video Impersonation

The newest and most advanced form of impersonation.

  • How it works: Using deepfake technology, fraudsters create a real-time, synthetic video of an executive or trusted partner. They may join or initiate a video conference (Zoom, Teams, etc.) to request an urgent, often confidential, financial action. Visual confirmation eliminates doubt, overriding the victim’s instinct to verify through a secondary channel.

What to Do to Protect Your Business:

Vigilance and strict procedures are your best defense against all forms of fraud, whether it’s a PPP scam or a deepfake attack.

  1. Never Give Out Login Credentials: Your bank will never ask for your online banking login ID, password, or one-time security codes over the phone, via email, or in a text message.
  2. Hang Up and Call Back: If you receive an unsolicited, suspicious call, especially one requesting sensitive information or an urgent action, hang up immediately and call back. Call your bank using the number you have on file (from their official website or the back of your card)—not a number provided by the suspicious caller.
  3. Establish Multi-Factor Verification (for all funds transfers): Implement a policy requiring two-person verification for all large-dollar wire and ACH transfers. Someone must conduct this verification through an out-of-band channel—meaning, if the request came via email, verify it by phone to a known number, or if it came via phone/video, verify it via internal email or instant message. Never use the phone number or email address provided by the person making the request.
  4. For Our PPP Customers: Contact 21st Century Bank at 763-767-2178 if you suspect you have been targeted in a scam attempt. Or reach out to us via our contact page on our website.

Report the incident to law enforcement and the FBI’s Internet Crime Complaint Center.

Protect Your Team:

Educate your employees about the full range of scams, emphasizing the PPP, BEC, and Deepfake threats. Make sure they understand that questioning an urgent request—even from a “CEO”—is a part of their job and the best way to protect the business. Stay vigilant and remember that protecting your financial information is crucial.

Key Resources for Reporting and Protection:

 
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