July 15th, 2020

The Paycheck Protection Program Counts on a Trusted Phone System

The Paycheck Protection Program (PPP) is supposed to be a simple way to prevent businesses from laying off their workforce during COVID-19. In theory it is simple. Many businesses–especially restaurants–don’t have cash flow right now because their workforce is in quarantine and so are all their customers. Ordinarily, these businesses might have no recourse but to fire their workforce to save on costs. The PPP, however, gives businesses large, low-interest loans, which will be forgiven if the business refrains from layoffs for eight weeks, and if the loans are used for payroll, rent, utilities, and other necessities.

But the application process has been said to be confusing, and there are widespread reports of fraud and of large businesses co-opting loan payments originally intended for small companies Because it's not always easy to know who's calling, there's every chance that a legitimate-sounding businessperson could call a bank, obtain a PPP loan, and then simply disappear with the funds. Fraud is a big issue.

Caller ID Counts in a Crisis

Plenty of legitimate businesses need PPP assistance, but they may not have personal relationships with banks. If a bank calls them with an urgent request for more information, or with advice about how to apply for a loan, the business owner may not know who’s calling. Unless the bank’s phone number is linked to its identity, their urgent call may get ignored and go to voicemail. So, the business owner may not be able to connect with their loan officer until it's too late

Applying for loan forgiveness was initially very complicated, and few businesses understood if they were qualified. No one wanted to take the risk of applying for loan forgiveness, learning that they were ineligible after the fact, and then potentially having to pay a heavy penalty.

In addition, the tax implications of the PPP also make it a difficult proposition for small businesses. Ordinarily, you can deduct payroll and other business expenses from your taxes, but the IRS recently ruled that this isn’t possible with expenses paid for with PPP funds. In other words, businesses now need to change their bookkeeping practices if they want to accept a loan.

Finally, not every bank is currently accepting PPP applications. This presents an additional barrier for small businesses who may now have to look at banks with which they had no previous relationship.  

However, small business owners have complex questions that need to be solved by talking to a real expert.

Rise in Robocalls Results in Missed Calls

Because business owners are trying to social distance like everyone else, the phone is the best communication channel to allow business owners to resolve their questions relatively quickly and often in a single interaction. Unfortunately, with the rise in robocalls and scams, people aren’t picking up the phone. And call authentication technologies may cause some legitimate business numbers to be labeled as spam.

It’s all too easy to imagine a situation where a business owner applies for a PPP loan online, receives an urgent phone call from the bank with a request for more information, and then lets that call go to voicemail because they don’t recognize the bank’s number. Alternatively, they could call the bank with a question, opt for a callback as opposed to waiting on hold, and then miss the callback for the same reason.

Meanwhile, a small business may not be as well-known by their own bank, which therefore may be reluctant to work with them. They may not already have accountants or attorneys. Because accountants and attorneys aren’t aware of the business beforehand, they have no way of knowing whether the business calling is legitimate. Therefore, questions and concerns from that business go to the back of the line.

What may seem like minor annoyances in a gentler time can turn into critical issues as businesses teeter on the brink.

Trusted Phone Systems Help Connect Businesses to PPP Resources

Something like this has already happened. So far, two Rhode Island businessmen have been charged with creating fake businesses – which were not open to the public at the beginning of the pandemic – and then trying to obtain payroll funds for nonexistent workers. A man in Texas has been charged with the same crime, creating a fictional business and workforce to get over $5 million in loans.

Most likely this is only the tip of the iceberg. As we know, it’s staggeringly easy to use VoIP to spoof a legitimate phone number, which means that a scammer could:

  • Make up a company
  • Pretend to be a representative from a legitimate company
  • Enlist other fraudsters to present themselves as references like CPAs and attorney

If you’re a representative from a legitimate business, and you call a bank looking for a PPP loan, the person at the end of the phone may be wondering, “Is this company for real?” If you haven’t had much of a relationship with the bank before, then you may have to jump through additional hoops to prove your identify – which means it’s going to be that much longer before you can get the funds you need to stabilize your company.

Here at Neustar, we believe that the name on a Caller ID should always match the name of the person calling your phone. In an era when identity is more important than ever, nobody should be able to use the phone to impersonate a legitimate organization. That’s why we’re helping carriers implement STIR/SHAKEN, and businesses to understand its impact. For more information, contact Neustar today!

View our video on robocalls and call spoofing here.

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