Scammers are actively targeting EIDL borrowers with fake settlement, forgiveness, or "hardship" offers, falsely claiming they can reduce or settle your loan debt. One cautious WBD borrower shared a recent letter from a scammer in which the business was offered a 90 percent reduction on its EIDL loan if they paid nearly $15,000 up front.
Please remember the SBA does not allow Offers in Compromise (OIC) for COVID-EIDL loans. Never pay upfront fees, share personal, or banking information with anyone claiming to represent the SBA.
Key Warning Signs and Facts:
- No Settlement Option: COVID-EIDL loans cannot be settled for less than the amount owed through an "offer in compromise."
- Scammer Tactics: Callers, emails, or mailed letters may pretend to be from the SBA, offering phony, pre-qualified "hardship accommodation" or loan modifications.
- Upfront Fees: If someone asks for money upfront to "process" a settlement, it is a scam.
- Official Communication: The SBA will not ask for sensitive information via email or text. Only trust communications from official .gov email addresses.
- Legitimate Help: For genuine issues with repayment, contact the SBA directly through its official website.
What to Do If Targeted:
- Do not pay money or provide bank details.
- Verify the caller's identity by calling the SBA directly.
- Report scammers to the Office of Inspector General (OIG).
If you are struggling with payments, contact the SBA directly via their website to discuss legitimate options like deferrals.
The Small Business Administration (SBA) has explicitly warned that COVID-19 EIDL loans cannot be settled via an "Offer in Compromise" (OIC). Any individual or firm claiming they can negotiate a settlement or "forgiveness" for these specific loans is likely a scammer.
If you are struggling with payments, only use official SBA channels:
- Hardship Accommodation Plan: This is a legitimate SBA program that allows for reduced payments for six months.
- Treasury Collections: If a loan is "charged off," it is referred to the U.S. Treasury for collection. The Treasury may add a 30% collection fee and can garnish wages or tax refunds.
How to Identify and Report Scammers
- Email Verification: The SBA only communicates from email addresses ending with @sba.gov.
- No Upfront Fees: The SBA never charges fees to apply for or manage a loan.
- Reporting: Report suspected fraud to the SBA Office of Inspector General (OIG) or via the National Center for Disaster Fraud at 1-866-720-5721.
