If you see a hard inquiry on your credit report for “US SM Bus Admin ODA”, it means that a disaster loan from the U.S. Small Business Administration’s Office of Disaster Assistance (ODA) has been opened in your name.
They exist purely to provide low-interest loans to help those in need recover from a declared disaster.
But if you did not apply for a Small Business Administration (SBA) loan, this is likely due to a fraudulent use of your identity.
Take immediate action to stop it by:
- freezing your credit
- contacting the SBA and issuing bank
- filing FTC and police reports, and
- having the hard inquiry removed
Why would the U.S. Small Business Administration check my credit?
The SBA performs a hard credit check whenever someone applies for a loan to examine the applicant’s creditworthiness.
This step is routine for the SBA and all lenders. Every hard credit inquiry shows up on your credit report.
Since lenders dislike excessive credit use, hard checks slightly lower your score. It’s best to apply for new credit infrequently and only when your chances of approval are high.
But when disaster strikes, the ODA is there to help communities recover through low-interest loans with extended repayment terms.
Before you can apply for a disaster loan, the ODA must classify the event as a “declared disaster”. You can review the list of declarations on the ODA’s website.
These are loans, not grants or gifts, so you must repay all borrowed funds with interest.
Why are SBA loans a vulnerable target for fraud?
Since the SBA tends to loan money to higher-risk individuals or businesses, and during times of crisis, they are more susceptible to fraud.
For example, while most SBA loans require a minimum credit score of 650, the COVID-19 Economic Injury Disaster Loan (EIDL) program offered loans to people with credit scores as low as 570.
Perhaps another reason as to why SBA loans have become easy targets may be due to the 2020 SBA website breach, compromising confidential and personal information such as:
- Social security numbers
- Birthdates
- Phone numbers and addresses
- Business names
On top of that, the ODA rapidly processes disaster loans in order to get help out quickly, thereby potentially causing incorrect information to slip through.
How to resolve a fraudulent “US SM Bus Admin ODA” credit check
Combat identity theft and remove fraudulent SBA ODA loan applications from your credit history by following these steps.
Freeze your credit and create fraud alerts immediately
Call all three credit agencies to freeze your credit and create fraud alerts.
Also, request any available information related to the fraudulent activity, such as the dates, loan amounts, bank information, and individual or business names.
Here are the phone numbers:
- Equifax: 1-800-525-6285
- Experian: 1-888-397-3742
- TransUnion: 1-800-680-7289
Freezing your credit means the agencies will not release your credit file. Since nearly every creditor requires this before lending money, this is an effective way to combat fraud.
It’s best to always keep your credit frozen, especially after identity theft. When you decide to apply for new credit accounts, you temporarily unfreeze it to release your file.
Creating fraud alerts informs creditors that they need to take additional steps to confirm your identity before lending. It’s not ironclad, but it’s a useful way to help prevent identity theft.
Contact the ODA
Notify the ODA of the fraud by contacting the Office of the Inspector General at 1-800-767-0385 or by reporting it online.
Provide as much information as possible, including:
- The SBA program involved
- The name and contact information of the person or business trying to open the loan
- A description of the event, including the general nature, scope, and time frame
- Any supporting evidence or documents
Request any available information related to the fraudulent actions for your records.
For other ODA general inquiries or questions, call 1-800-659-2955. For the COVID-19 EIDL program, call the dedicated line at 1-833-853-5638. The SBA contact page has other relevant phone numbers and links.
File a theft report with the Federal Trade Commission
The Federal Trade Commission (FTC) has a streamlined identity theft resolution process. Any victim of identity theft, including fraudulent SBA loans or perhaps someone opening a credit card in your name, must complete this vital step.
Gather your information and visit www.identitytheft.gov. Follow the system’s prompts to report the identity theft and create a customized recovery plan.
You will be issued an ID Theft Affidavit. Keep a copy of this document. You will need provide copies to the necessary credit issuers, retailers, banks, or financial institutions.
Report the fraudulent loan application to the bank and police
With your ID Theft Affidavit ready, call the fraud or security department of the bank or company that initiated the loan. Request to have the new account or loan closed immediately.
Then reach out to your local police and file an identity theft report. Bring the ID Theft Affidavit along with your ID and all other supporting documents.
Your state’s Attorney General’s Office may offer a way to report crimes, including identity theft. It’s worth notifying this office as well.
Keep copies of all documents. Maintaining detailed records of all actions is valuable, including dates, individuals involved, any contact information, the topics covered, and any resolution or outcome.
Remove the hard inquiry and monitor credit reports
Finally, you need to have the fraud removed from your credit history. Review your credit reports for any fraudulent credit checks, loans, accounts, and anything that shouldn’t be there.
Use your ID Theft Affidavit and other documents to dispute all fraudulent items with the credit agencies. Once resolved, review your credit reports to confirm they are not listed.
Otherwise, you may need to file another dispute if you are not satisfied with the resolution.
As a victim of identity theft, your information is likely still in the hands of someone with malicious intent. Stay vigilant by:
- Monitoring your credit reports regularly
- Enrolling in a credit-monitoring service, sometimes offered as a free add-on from banks, credit cards, and other service providers
- Protecting your confidential information, including SSN, DOB, address, and any other identifying details
- Creating complex passwords for mobile devices and online logins, with a unique version for each website