FTC and SBA Warn Companies About Possible FTC Act Violations Related to Misleading Website Marketing Information on SBA Loans

The FTC and SBA recently announced that warning letters were issued to a California-based company and a Utah-based company about allegedly providing misleading website marketing information that could lead small business consumers to believe that the marketers are affiliated with the SBA, or that small businesses can apply for PPP or other CARES Act-related loans on the companies’ websites.

The California company was warned about possible violations of the FTC Act based, in part, upon a claim on its website to small business-consumers that “Your Paycheck Protection Program Loan starts here,” inviting the submission of PPP application information and suggesting an affiliation with the SBA and approved PPP lenders. Additionally, the Utah company was warned about possible FTC Act violations stemming from similar claims as well as assertions that its affiliated lead generation company is an authorized SBA loan packager for the PPP, and a reference to fees for that service, even though such fees are prohibited by the SBA.

The letters warn the recipients to take immediate action to ensure all deceptive claims are removed and to remediate any harm to small business consumers as a result of the claims.  The companies are also directed to notify the FTC within 48 hours about the specific actions they have taken to address the agency’s concerns.