FTC seeks injunction against company posing as SBA lender
On April 17, the FTC filed a complaint against a Rhode Island-based company and its owner (defendants) for allegedly violating the FTC Act by claiming to be an approved lender for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) even though the defendants are neither affiliated with the SBA nor are they an SBA-authorized lender. The FTC alleges in its complaint that the defendants made deceptive statements on their websites, such as “WE ARE A DIRECT LENDER FOR THE PPP PROGRAM,” and directly contacted small businesses claiming to be representing the SBA in order to solicit loan applications on behalf of the businesses’ banks. The FTC states that the defendants have received hundreds, if not thousands, of loan applications from businesses and continue to claim they can make PPP loans despite receiving a cease-and-desist letter earlier this month from the SBA. The FTC seeks injunctive relief to prevent the defendants from continuing to engage in the unlawful acts and practices, as well as “rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief” that the court deems necessary to redress any consumer harm, and an award of the costs for bringing the action.