Sens. Amy Klobuchar, D-Minn., and Elizabeth Warren, D-Mass., are pushing the Federal Trade Commission to take more steps to shield small businesses from scams as they try to access aid during the coronavirus pandemic.
In a Wednesday letter to agency Chairman Joseph Simons, 11 Democrats led by Klobuchar and Warren raised concerns about scammers “exploiting” the popularity of the Paycheck Protection Program, Small Business Administration assistance designed to keep employees on payroll at distressed small businesses. They pointed to reports of people sending fake offers of SBA loans to companies in order to steal personal information.
“Given the seriousness of this issue, we urge the FTC to take action to better inform small businesses about fraud and assist victims in understanding how they can get help and avoid falling victim to exploitation,” the senators wrote to Simons, who leads the agency charged with protecting consumers and rooting out deceptive business practices.
The lawmakers asked what additional steps the FTC would take to inform small business owners about deceptive practices, prevent scams and assist victims. They also questioned what the agency is doing specifically to protect small businesses owned by women, minorities and veterans, as well as small companies in rural areas, which they said are more vulnerable to scams because they are more likely to lack access to capital.
Late last month, the FTC published a list of tips on how business owners seeking SBA assistance can identify scams.
Klobuchar and Warren, among apparent Democratic presidential nominee Joe Biden’s 2020 running mate choices, have repeatedly pushed for tougher oversight of the U.S. economic and health-care response to the pandemic.
The FTC did not immediately respond to a request for comment on the senators’ letter.
As efforts to slow the pandemic’s spread ravage the economy, the federal government took steps to swiftly dole out an unprecedented $2 trillion aid package passed in March. The effort led to a range of issues, as the first round of $350 billion in small business aid funding evaporated in days. Several large public companies got assistance and some companies without an existing banking relationship found themselves shut out of loan access.
The spending bonanza has also opened opportunities for fraud. The first two people were charged Tuesday with fraudulently applying for assistance by making false statements to influence the SBA.
The Senate returned to Washington this week as Congress considers its next moves to blunt the damage from the outbreak. The House will head back to the Capitol as soon as next week.
Looming fights in Congress include whether to send federal aid to state and local governments and pass liability protections for businesses as they reopen during the pandemic.