FTC Secures $59 Million Settlement over Fintech Firms’ Allegedly Misleading PPP Loan Claims

  • The FTC has reached settlement agreements with fintech firms Biz2Credit, Inc. and Oto Analytics, Inc. (doing business as Womply) to resolve allegations that the companies misled small businesses during the COVID-19 pandemic in their promotion and handling of Paycheck Protection Program (PPP) loans, violating the FTC Act and the COVID-19 Consumer Protection Act. Biz2Credit issued a press release concurrent with the settlement providing its perspective and noting that the settlement contained no admission of wrongdoing.
  • In its complaint against Biz2Credit and its subsidiary, the FTC alleges the company falsely advertised rapid PPP loan application processing times, which were actually riddled with delays, with average processing times taking nearly twice as long as the company promised. Despite being aware of these delays, the FTC claims that Biz2Credit continued to promote fast processing times and disregarded requests from consumers to withdraw their applications, resulting in further delays and sometimes preventing consumers from obtaining PPP funds through other sources.
  • The FTC’s complaint against Womply and its CEO alleges the company falsely promoted fast processing times and high application approval rates, when, according to the FTC, more than 60 percent of applications submitted through the company did not result in funding. The FTC also claims the company advertised individualized, timely customer service but failed to adequately respond to requests and, at one point, disconnected its telephonic customer support line.
  • Both proposed settlements prevent the companies from making any deceptive, false, or unsubstantiated claims about their loan applications or financial services and products. Under the FTC’s proposed settlements, Biz2Credit must pay a $33 monetary judgment and Womply is required to pay $26 million.