FTC Actions Against Companies Making Deceptive Pandemic Loan Promises Lead to Record $59 Million in Damages

FTC Actions Against Companies Making Deceptive Pandemic Loan Promises Lead to Record  Million in Damages

The Federal Trade Commission is taking action against two companies – Biz2Credit and Womply – that made false promises to small businesses seeking to take part in the Paycheck Protection Program (PPP), delaying and sometimes preventing them from obtaining funds they needed to keep their businesses afloat during the COVID-19 pandemic.

The companies have agreed to settle the FTC’s charges against them: Biz2Credit will pay $33 million and Womply will pay $26 million to the FTC for small businesses harmed by their deceptive conduct. These are the largest damages amounts ever secured by the agency under Section 19 of the FTC Act, and include money consumers lost because of the companies’ conduct, even if consumers made no payments directly to the companies.

“Biz2Credit and Womply deceived small business owners trying to secure loans at their time of greatest need,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to protecting small businesses from these sorts of unlawful practices.”

These cases are part of the FTC’s continuing work to protect small businesses from deceptive and unfair practices in the marketplace. In addition to these cases, the FTC recently revised the Telemarketing Sales Rule to extend protections to businesses that are targeted with illegal telemarketing.


Biz2Credit, Inc., and its subsidiary, Itria Ventures, have agreed to pay $33 million in damages to settle the Federal Trade Commission’s charges that they deceptively advertised that consumers’ emergency PPP loan applications would be processed in an average of 10-14 business days when, in reality, the average processing took well over a month.

The FTC’s complaint that Biz2Credit’s application processing was riddled with delays, and the average processing time was double what the defendants claimed, with tens of thousands of consumers waiting more than two months for a final determination. Even though they were aware of these delays, the defendants continued to make their false timing claims to consumers until nearly the end of the program.

Biz2Credit’s promises of fast processing times were critical because the PPP was extraordinarily time-sensitive, providing loans on a first-come, first-served basis. When the program ran out of funds in May 2021, the government stopped accepting new PPP loan applications, leaving some Biz2Credit consumers without any funds. Even the consumers who eventually obtained loans were deprived for a time of funds they needed immediately.

The FTC’s complaint also says that Biz2Credit unfairly ignored many consumers’ repeated and urgent pleas to withdraw their loan applications. As a result, the defendants delayed and sometimes even prevented these consumers from obtaining PPP funds elsewhere. The complaint also alleges that the defendants designed their application process to lock in as many consumers as possible before underwriting these loans, restricting these consumers from submitting additional applications to other PPP lenders.

In addition to the $33 million monetary judgment, the settlement with Biz2Credit also prohibits the defendants from misrepresenting key information about loan applications or any material fact about a government benefit. The proposed order also prohibits Biz2Credit from failing to allow consumers to promptly withdraw their applications.


Womply and its CEO, Toby Scammell, have agreed to pay $26 million to settle FTC charges they preyed on small businesses in desperate need of PPP funding. The FTC’s complaint alleges they widely advertised that small businesses – particularly one-person businesses like gig workers – could successfully get PPP funding when they applied through Womply. The complaint charges, however, that more than 60 percent of Womply applications never resulted in funding.

In addition, according to the complaint, Womply and Scammell advertised that their automated processes and good customer service would help small businesses secure PPP loans fast. In fact, applicants regularly faced significant issues that slowed down or fully hindered their applications and were often unable to receive customer service assistance they were promised, according to the complaint.

The complaint notes that millions of consumers initiated PPP applications through Womply, but many who were eligible never received funding because the company and its CEO failed to fix known technical issues with their system or provide consumers with assistance.

According to the complaint, the company promised that its “helpful, friendly support agents” would assist applicants through the process. However, after just one month and more than 4,800 support requests from applicants, Womply completely deactivated its phone-based customer service. When applicants used the company’s online chat support, they often didn’t receive replies for hours or sometimes days and some went to great lengths looking for answers, including by reaching out to employees of a third-party company that worked with Womply on their personal social media accounts.

The company’s advertising and marketing also focused on the speed with which applicants’ loans would be funded, using product names like “PPP Fast Lane” and promises that loan applications would be prepared within 24 hours and “faster than a bank.” But the complaint details multiple examples of Womply failing to deliver on these promises.

Small business owners still faced problems even after their applications were completed and approved by SBA. One small business owner whose complaint to Womply is highlighted in the complaint noted that she received notice that her loan had been funded, but never received the money. After spending weeks pleading to Womply for help without success, she had to close her business due to a lack of funding.

In addition to the $26 million monetary judgment, the settlement with Womply and Scammell prohibits them from making any deceptive, false or unsubstantiated claims about financial services or products.

The Commission votes authorizing the staff to file the complaints and proposed stipulated orders in both cases was 3-0. The complaint and proposed order in Biz2Credit were filed in the U.S. District Court for the Southern District of New York; the complaint and proposed order in Womply were filed in the U.S. District Court for the Northern District of California.

The staff attorneys on the Biz2Credit matter are Evan Zullow, Wendy Miller, and James Doty of the FTC’s Bureau of Consumer Protection; the staff attorneys on the Womply matter are Julia Heald, Katherine Worthman, and Paola Henry, also of the FTC’s Bureau of Consumer Protection.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. 

Official news published at https://www.ftc.gov/news-events/news/press-releases/2024/03/ftc-actions-against-companies-making-deceptive-pandemic-loan-promises-lead-record-59-million-damages

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