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  • In 2020, the Federal Trade Commission (FTC) received nearly 100,000 business or personal loan fraud reports, many of them related to Small Business Administration (SBA) loan identity fraud.
  • That’s more than double the number of loan fraud reports from a year earlier. The Identity Theft Resource Center (ITRC) has also seen a spike in SBA loan identity crime reports since the COVID-19 pandemic.
  • Identity thieves apply for SBA loans (primarily Economic Injury Disaster (EIDL) and Paycheck Protection Program (PPP) loans) using stolen Social Security numbers and business Employer Identification numbers (EINs).
  • Scammers are also targeting consumers through phishing schemes in an attempt to steal their Social Security Numbers and other personal information needed to commit SBA loan identity fraud.
  • If anyone believes they are the victim of an SBA loan identity crime or would like to learn how to protect themselves from becoming a victim, they can contact the ITRC to speak with an advisor toll-free at 888.400.5530 or via live-chat. Just go to www.idtheftcenter.org to get started.

Small Business Administration (SBA) loan identity fraud spiked in 2020 due to COVID-19, and it continues to be a growing issue in 2021. The Federal Trade Commission (FTC) says in 2019, they received 43,920 reports of fraud involving business or personal loans; the number more than doubled in 2020 as the FTC had 99,650 reports. The FTC acknowledges that not all of the reports are related to SBA loan identity fraud, but also notes many of them are.

The Identity Theft Resource Center (ITRC) has seen a spike in calls and live-chats around SBA loan-related identity theft. The contacts continue today as contact center advisors work to help victims. Here is a testimonial from one victim who turned to the ITRC regarding their SBA loan identity crime case:

“I want to thank you for all your suggestions. You are the third (organization) I have contacted and by far the most helpful. I received a form from the Small Business Administration, and after returning it with the police report and the Identity Theft Report, I was informed that my debt with them would be canceled. It is such a huge weight off me. I did everything you suggested, and our credit is frozen with all the CRA’s. Thank you again.”

There are different forms of SBA loan-related identity theft of which  businesses and consumers should be aware:

Economic Injury Disaster Loans (EIDLs)

Economic Injury Disaster (EIDL) loans, loans for businesses that suffer substantial economic injury located within a disaster area, have always been available through the SBA. However, they have been expanded as part of the CARES Act to provide relief to businesses experiencing financial loss due to COVID-19. Identity fraud from an EIDL loan occurs when a threat actor applies for an EIDL loan using either a consumer’s Social Security Number (SSN) or a business’s Employer Identification Number (EIN).

Paycheck Protection Program Loans (PPPs)

Paycheck Protection Program (PPP) loans were designed to help businesses maintain their payroll and keep their workforce during COVID-19, and they are available through a lender. Identity fraud from a PPP loan occurs when an identity thief applies for a PPP loan using a stolen SSN, a business EIN or other stolen personal information needed to obtain a loan.

What to do if You Are a Victim of SBA Loan Identity Fraud

If a consumer or a business is the victim of an SBA loan identity crime (whether it’s from either an EIDL or PPP loan), they should take the following steps:

  1. Go back to the source of the loan to notify them of the identity fraud. If the identity fraud is from an EIDL loan, the victim should contact the SBA. If the fraud involves a PPP loan, the affected party should contact the lender that issued the loan. See below for more information on what the SBA requires people to submit, where to submit it, and details on their process.
  2. File an Identity Theft Report with the FTC at www.IdentityTheft.gov. An Identity Theft Report is one of the required documents by the SBA to cancel the loan debt as quickly as possible. Other documents needed include photo identification issued by a federal or state agency and a completed and signed Declaration of Identity Theft. For more information on the steps required by the SBA, click here.
  3. Place a credit freeze to lock credit files until they are needed.A credit freeze is the most effective way to ensure new loans or accounts are not opened.
  4. A less effective option is to place a fraud alert on credit files to alert potential creditors to take extra precautions before extending credit.
  5. Verify with the Secretary of State’s Office or another government agency where the business is registered to ensure the company’s ownership and registration status have not been changed.

Contact the ITRC

Anyone who believes they are a victim of SBA loan identity fraud should contact the ITRC for more information. People can speak to an advisor by phone (888.400.5530) or by live-chat to develop a resolution plan. Anyone who wants to document their steps can use the ITRC’s ID Theft Help app’s case log feature. Consumers who want to learn more can also check out our latest education resources at www.idtheftcenter.org.

  • A Canon data breach resulted from a ransomware attack on the company by the Maze ransomware group. Canon is just one of many companies recently hit with a ransomware attack, a trend the Identity Theft Resource Center predicts to continue in 2021.  
  • The mobile video game Animal Jam suffered a data breach affecting 46 million users after threat actors stole a database. However, WildWorks, the game’s owner, has been very transparent throughout the entire process, setting an example of how businesses should approach data breaches. 
  • Insurance tech company Vertafore discovered files containing driver-related information for 28 million Texas residents were posted to an unsecured online storage service.  
  • For more information about recent data breaches, consumers and businesses should visit the ITRC’s data breach tracking tool, notifiedTM.  
  • Keep an eye out for the ITRC’s 15th Annual Data Breach Report. The 2020 Data Breach Report will be released on January 27, 2021. 
  • If you believe you are a victim of identity theft from a data breach, contact the ITRC toll-free at 888.400.5530 or through live-chat on the company website.  

Notable Data Compromises for November 2020 

Of all the data breaches the Identity Theft Resource Center (ITRC) tracked in November, three stood out: Canon, WildWorks – Animal Jam, and Vertafore. All three data events are notable for different reasons. One highlights a trend and prediction made by the ITRC; another shows transparency by the company throughout the process; the third leaves 28 million individuals’ driver-related information exposed. 

Canon 

Camera manufacturer Canon recently suffered a data breach that was caused by a ransomware attack, but the company only acknowledged the attack was the result of ransomware in November. According to techradar.com and Bleeping Computer, the Canon IT department notified their staff in August that the company was suffering “widespread system issues affecting multiple applications, Teams, email and other systems.” On November 25, the company acknowledged the Canon data breach was due to a ransomware attack by the Maze ransomware group.  

It is unknown how many people are affected by the Canon data breach. However, files that contained information about current and former employees from 2005 to 2020, their beneficiaries, and dependents were exposed. Information in those files included Social Security numbers, driver’s license numbers or government-issued identification numbers, financial account numbers provided to Canon for direct deposit, electronic signatures and birth dates. 

Canon is just one of many companies that have been hit with a ransomware attack. As the ITRC mentioned in its 2021 predictions, cybercriminals are making more money defrauding businesses with ransomware attacks and phishing schemes that rely on poor consumer behaviors than traditional data breaches that rely on stealing personal information. As a result of the ransomware rise, data breaches are on pace to be down by 30 percent in 2020 and the number of individuals impacted down more than 60 percent year-over-year.  

WildWorks – Animal Jam 

Animal Jam, an educational game launched by WildWorks in 2010, suffered a data breach after threat actors stole a database. According to the WildWorks CEO, cybercriminals gained access to 46 million player records after compromising a company server. The information exposed in the Animal Jam data breach includes seven million email addresses, 32 million usernames, encrypted passwords, approximately 15 million birth dates, billing addresses and more. 

WildWorks has been very transparent throughout the entire process. The company provided a detailed breakdown of the information taken in the Animal Jam data breach, how the data event happened, where the information was circulated, whether people’s accounts are safe and the next steps to take. The ITRC believes WildWorks has set an example of how other businesses should share information with impacted consumers after a data breach.  

Anyone affected by the Animal Jam data breach should change their email and password for their account (consumers should switch to a 12-character passphrase because it is easier to remember and harder to guess). Users should also change the email and password of other accounts that share the same email and password. If any users think their account was used illegally, they are encouraged to contact the Animal Jam security team by emailing support@animaljam.com  

Vertafore 

Vertafore, a Denver based insurance tech company, recently discovered three files containing driver-related information were posted to an unsecured online storage service. The files included data from before February 2019 on nearly 28 million Texas drivers. Vertafore says the files have since been secured, but they believe the files were accessed without authorization. To learn more about this data breach, read the ITRC’s latest blog, and listen to our podcast on the event. 

Unfortunately, companies continue to leave databases unsecured, which is tied with ransomware as the most common cause of data compromises, according to IBM. Consumers impacted by the Vertafore data event need to follow the advice given by Vertafore and the Texas Department of Public Safety

notifiedTM  

For more information about recent data breaches, consumers and businesses should visit the ITRC’s data breach tracking tool, notifiedTM, free to consumers. Organizations that need comprehensive breach information for business planning or due diligence can access as many as 90 data points through one of the three paid notified subscriptions. Subscriptions help ensure the ITRC’s identity crime services stay free.  

Contact the ITRC 

If you believe you are the victim of an identity crime or your identity has been compromised in a data breach, you can speak with an ITRC expert advisor at no-cost by phone (888.400.5530) or live-chat. Just go to www.idtheftcer.org to get started. Also, victims of a data breach can download the free ID Theft Help app to access resources, a case log and much more.