Last week, a Rhode Island company and its owner were prohibited from misrepresenting they are affiliated with the U.S. Small Business Administration (SBA) as part of a settlement resolving Federal Trade Commission (FTC) charges they misled consumers in the early days of the coronavirus pandemic.
Ponte Investments, LLC, and its owner were charged by the FTC in April with misleading small businesses to think they had an affiliation with the SBA and could offer companies access to the coronavirus relief programs administered by the agency.
Using the business name “SBA Loan Program” and the website SBALoanProgram.com, Ponte and his company targeted small businesses directly through telephone calls, e-mails, and the website, according to the FTC’s complaint, claiming to be representing the SBA and soliciting loan applications on behalf of the businesses’ banks. They also made statements on their website like “WE ARE A DIRECT LENDER FOR THE PPP PROGRAM!” and “[w]e are currently offering stimulus relief spending under the Economic Security Act (Cares Act).”
The settlement prohibits defendants from (1) misrepresenting that they are authorized to accept or process applications for SBA loans and (2) misrepresenting that they are the SBA or are otherwise affiliated or associated with the SBA or the U.S. Government. Pursuant to the terms of the settlement, the defendants will no longer be able to use the trade name or domain name SBA Loan Program. The settlement also bars defendants from disclosing, using, or benefitting from information collected in connection with the marketing of any SBA-related products or services unless they obtain the consumer’s express informed consent.
The Commission vote approving the stipulated final order was 4-0-1, with Commissioner Christine S. Wilson recorded as not participating. The FTC filed the order in the U.S. District Court for the District of Rhode Island, and it was entered by the Court on September 25, 2020.
Stipulated final orders have the force of law when approved and signed by the District Court judge.