FTC Takes Action to Stop Company Posing as SBA Lender and Preying on Small Businesses

The Federal Trade Commission has charged a Rhode Island-based company and its owner with falsely claiming to be an approved lender for a federal coronavirus relief lending program and asked a federal court to immediately halt their misrepresentations.

The FTC’s complaint alleges that Ponte Investments, LLC, also doing business as SBA Loan Program and SBA Loan Program.com, and its owner John C. Ponte, have been falsely claiming an affiliation with the U.S. Small Business Administration (SBA) and marketing themselves to small businesses as an approved lender under SBA’s Paycheck Protection Program (PPP). The PPP is a program authorized as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). According to the FTC, the defendants are neither affiliated with the SBA in any way, nor are they an SBA-authorized lender.

“In this time of incredible challenge for all Americans, it is disturbing to see these defendants preying on desperate businesses looking for ways to keep their employees financially secure,” said FTC Chairman Joe Simons. “The FTC is on guard, and we will act to protect consumers from scammers looking to take advantage of this crisis.”

According to the FTC’s complaint, the defendants have called small businesses directly, claiming to be representing the SBA and soliciting loan applications on behalf of the businesses’ banks. They also have 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).”

Screenshot from defendants’ website (click image to enlarge)

The defendants received a cease-and-desist letter from the SBA on April 10 that noted the defendants were not an SBA-authorized lender and demanded that they stop their misrepresentations.

The FTC alleges that hundreds, if not thousands, of businesses have submitted loan applications to the defendants. The complaint notes that actual PPP funding authorized in the CARES Act has dried up, while the defendants have lured in small businesses with deceptive claims they could help.

In its filing, the FTC asks the court to order the defendants to immediately stop representing themselves as either associated with a federal agency or an authorized SBA lender.

The FTC encourages anyone with information about scams related to the coronavirus pandemic to report them to the agency at ftc.gov/complaint.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of Rhode Island.

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. The case will be decided by the court.