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    Home » FTC’s first coronavirus lawsuit accuses company of luring consumers with fake SBA connections
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    FTC’s first coronavirus lawsuit accuses company of luring consumers with fake SBA connections

    techempireBy techempire4 Comments4 Mins Read
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    The COVID-19 crisis has left many small businesses struggling, so unfortunately we have to warn them about another threat. According to a lawsuit just filed by the Federal Trade Commission, a Rhode Island company called the “SBA Loan Program” has been soliciting applications from small businesses but has no connection to the U.S. Small Business Administration and the loan programs currently being implemented by the agency. . run.

    Under the CARES Act, eligible small businesses can apply for loans under a temporary SBA program called the PPP (Paycheck Protection Program). Loans can only be made by SBA-authorized lenders.

    Let us repeat the most important facts: Defendants Ponte Investments, LLC and John C. Ponte were not authorized by the SBA to make loans under the CARES Act. Nonetheless, the FTC says the defendants have contacted people claiming to be calling from the SBA, or saying, “We are SBALoanProgram.com and per SBA regulations, getting approved is easier than ever!”

    SBA Loan Program Complaint ExhibitsThe defendants also lured consumers through the URL SBALoanProgram.com, according to the complaint. Visitors to the site will immediately see a pop-up that says “CARES Act Paycheck Protection Program.” The pop-up also tells some visitors “We are a direct lender for the PPP loan program!” The site continues, “Can’t get your bank to answer the phone? Get the personal attention you need. Our staff is here to help.”

    Clicking “Apply Here” takes consumers to an online application that says “CARES Act Paycheck Protection Program” in capital letters and also tells some consumers “We are a Direct Lender for the Payment Protection Program.”

    At the very bottom of the page, behind a “Submit” button printed in light gray on a white background, it reads: “We are not the U.S. Government. If you would like to apply for a disaster relief loan, please click on this link to visit the SBA website www[dot]sba.gov/disaster. The SBA does not offer the Paycheck Protection Program. ” But even if consumers saw this language — a big assumption given how the defendants designed the page — the FTC claims it’s too little, too late. What’s more, the text remains undisclosed The SBA loan program was not authorized to make PPP loans, which means the fine print did not correct what the FTC said was the deceptive network impression the defendants conveyed to consumers.

    According to the complaint, the SBA – real SBA – A cease and desist letter has been issued to the SBA loan program. But the SBA loan program continues to claim it will provide PPP loans and encourages consumers to submit applications.

    The complaint alleges that the defendants falsely represented that they were affiliated with the Small Business Administration. But the harm to consumers goes far beyond this challenged claim. To date, more than 1.6 million small businesses who applied through authorized lenders have received $349 billion in relief, meaning CARES Act funding available for PPP loans is now available. The result: hundreds or even thousands of people who applied on the defendants’ websites could be out of luck, putting their businesses and employees in even more danger. The case is pending in federal court in Rhode Island.

    What words describe small businesses?

    • As you persevere in the current economic climate, be wary of institutions seeking to make a bad situation worse. Your go-to source for information now and on future developments should be the SBA’s Coronavirus Relief Options page.
    • If someone calls or emails you out of the blue claiming to be from the SBA, suspect fraud.
    • We want to know about questionable coronavirus promotions targeting small businesses and consumers. Did you notice anything wrong? Report to the Federal Trade Commission.

    We also have a message for those looking to make a quick buck at the expense of struggling small businesses. The Federal Trade Commission will aggressively pursue those who use deceptive and unfair practices to take advantage of the coronavirus crisis.

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