Peril for PPP: The State of Fraud in SMB Lending

The U.S. government’s Paycheck Protection Program appears particularly vulnerable to fraudsters.

Boston, June 11, 2020 –The market was beset by the COVID-19 pandemic, with its accompanying damage to the financial performance of borrowing small businesses, pressures on payroll, and small-and-midsize-business bailout programs. These bailout programs will be magnets for fraudsters who have long been honing their techniques on SMB lenders. The PPP, given its scale, complexity, and document intensiveness, appears particularly vulnerable to fraudsters, whose skills are strongest in areas such as loan stacking, document tampering, and document counterfeiting.  

This Impact Report is based on a survey, conducted by Aite Group and the Small Business Financial Exchange and fielded online between December 2019 and March 2020, of 45 U.S.-based FIs extending loans to SMBs. Among the types of FIs surveyed are traditional banks of various sizes, alternative lenders, finance companies, credit unions, and community banks.

This 30-page Impact Report contains 17 figures and five tables. Clients of Aite Group’s Wholesale Banking & Payments or Fraud & AML service can download this report, the corresponding charts, and the Executive Impact Deck.

This report mentions Acxiom, AimBrain, BehavioSec, BioCatch, DecisionLogic, Deluxe, Dragnet Solutions, Early Warning Services, Emailage (a LexisNexis Risk Solutions company), Entrust Datacard, Equifax, Experian, FIS, Fiserv, Giact, ID Analytics, IdentityMind, IDology, InAuth, Kofax, Kount, LexisNexis Risk Solutions, Melissa Data, MicroBilt, Neuro-ID, Neustar, NuData Security, OneSpan, Pindrop Security, RSA Security, SecuredTouch, Small Business Financial Exchange, Socure, TowerData, TransUnion, Trulioo, and Whitepages Pro.

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