DENVER — What happens when you get a demand letter in the mail for a $20,000 PPP loan that you never took out? That's what happened to a Denver business owner who is warning that it could happen to you, too.
Tim Hart gets a lot of junk mail, which is what he thought the demand letter from Scratch Services was, at first.
"It's a notice of default and demand for payment for $20,873. And they were demanding payment by Feb. 6," said Hart, who then thought the letter might be a phishing scam. "I did not apply for this loan. I did not receive $20,000."
Contact Denver7 has learned the letter is the real deal, part of a batch of demand letters sent by mail to recipients of SBA loans.
However, Hart said, it appears someone had stolen his identity and taken out a PPP loan in his name using an email he has never seen. Disputing the charge has not been simple.
"I'm logging my hours, so far. It's 18 hours, 18 hours of my time," said Hart, who said phone calls, emails, police reports and documents at little response last week. "I was getting absolutely no communication from either Scratch, which is the loan servicer. As well as Cross River Bank. I had to get this resolved before Feb. 6 because I am afraid of really a bad hit on my credit."
Contact Denver7 has been digging into the larger issue at play: Identity theft that facilitates fraud against the government.
"Every single government program is at risk of fraud," said Phil Weiser, the Colorado Attorney General, who said his office is targeting this type of fraud and setting up a False Claims Act program. "This PPP fraud is only one version of what we know to be a rampant problem of identity theft hurting people."
Contact Denver7 also reached out to Hart's loan servicer, Scratch, and a spokeswoman stated in an email they are "actively working to investigate and resolve the issue."
Scratch also stated if you did not take out a loan and receive a demand letter, there is a formal dispute process, but Hart said, it places the onus on the victim instead of the bank.
"The bottom line is someone didn't qualify a potential borrower sufficiently and cut a check for $20,000 that they didn't deserve," said Hart, who froze his credit and got a response from Scratch this week. "I get a sense that there are people paying attention to this now, and that would lead to a resolution soon, yes."
If you think you are a victim of identity theft or to protect yourself from identity theft, you can find resources here: https://www.identitytheft.gov/#/
For Colorado cases, the Attorney General's office, get resources here: https://www.stopfraudcolorado.gov/
If you suspect that someone has stolen your identity and fraudulently used your Social Security Number or employer identification number, it is important to monitor both your personal and business credit reports.
- Read the FTC's Free Credit Report article to learn how to monitor your personal credit.
- To monitor your business credit, you can get a copy of your company's report from Experian, Equifax, Dun & Bradstreet, or several smaller credit reporting services.
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