Small businesses: FTC has your back this week – and every week

We’re delighted to celebrate National Small Business Week from April 28th to May 4th. The FTC is proud to champion the interests of small businesses throughout the year by challenging unfair or deceptive practices and unfair methods of competition. Here are seven recent examples of how the FTC works to ensure that small businesses get a fair shake in the marketplace.

• Taking action against PPP-related deception. As small businesses felt the financial strain of the pandemic, the federal government came through with emergency capital via the Paycheck Protection Program. But that didn’t stop some operators from targeting businesses with misrepresentations about PPP funding. The FTC filed complaints against two unrelated defendants, Biz2Credit and Womply, for deceptive claims they made to small businesses – false promises that delayed or even preventing them from participating in the Paycheck Protection Program. The bottom line: settlements totaling $59 million that will be used for refunds for affected companies.
• Expanding protections for small businesses under the Telemarketing Sales Rule. FTC rules need to reflect the realities of the marketplace, which is why – after substantial input from businesses and consumers – we amended the Telemarketing Sales Rule to expand prohibitions against misrepresentations to include B2B telemarketing.
• Challenging predatory financing that cheated small businesses. When small businesses need loans, capital can be hard to come by. Some shady operators take advantage of that fact by luring business owners in with bogus claims. The FTC sued RCG (also known as Richmond Capital Group) for misrepresenting the terms of merchant cash advances and then threatening violence to compel people to pay up. Some of the defendants settled, but owner Jonathan Braun said “See you in court” – and that’s just what FTC staff did. The result: a big win for small businesses, a $20.3 million judgment, and an order that permanently bans Braun from the merchant cash advance and debt collection industries.
• Fighting back against government and business imposters. A frantic employee tells you “The IRS (or Social Security Administration or FTC or some other agency) demands money by the end of the day!” Or maybe a customer claims to have paid a bill your business never sent. They’re both forms of imposter scams that bilk consumers and businesses out of millions of dollars each year. To protect your small business from financial losses – and to protect your company name if it’s been stolen by a scammer – the FTC just finalized the Trade Regulation Rule on Impersonation of Government and Businesses, which provides powerful tools in the fight against imposters. We’ve also proposed new protections to combat the impersonation of individuals, especially when scammers use technology like AI-enabled deep fakes.
• Empowering small businesses to spot, spot, and report scams in multiple languages. To keep small businesses up on how B2B crooks are trying to take them down, the FTC revised its Scams and Your Small Business brochure to reveal the latest tactics favored by fraudsters – for example, government and business impersonators, bogus invoices, tech support scams, and ransomware. But there’s something new. Small business owners speak many languages and scammers appear to be fluent in all of them. So we’ve published Scams and Your Small Business in English, Spanish, Simplified Chinese, Korean, and Vietnamese. Every page features actionable advice on how to spot, stop, and report questionable practices that injure small businesses. In addition, the FTC now is accepting reports in multiple languages about suspicious conduct targeting consumers or businesses. Call us at (877) 382-4357 and press 3 to speak to an interpreter between 9AM and 5PM Eastern Time.
• Working with states to pass right-to-repair laws. After debunking common misconceptions about product repair in its Nixing the Fix report and bringing law enforcement actions to challenge illegal terms in product warranties, the FTC continues to work toward ensuring that dealers compete fairly with independent third-party repair businesses. One example is our work in support of state right-to-repair laws. For example, the FTC recently testified before the Colorado General Assembly’s Committee on Business Affairs and Labor in support of proposed legislation to expand the state’s right-to-repair statute to include digital electronics.  
• Ensuring that “Made in the USA” means made in the USA. Many small businesses make an effort to keep manufacturing jobs in their communities. If they meet the standards established in the FTC’s Made in USA Labeling Rule and Statement on U.S. Origin Claims, they have the right to proudly label or advertise their products as “Made in the USA.” But as the FTC’s long record of law enforcement establishes, other companies undermine those efforts by falsely slapping that statement on products even though significant parts, processing, and labor aren’t U.S.-based. The FTC won’t stand for that and instead will stand up for small businesses who can truthfully say their products are made in the USA.

According to the Small Business Administration, there are 33,185,550 small businesses in the United States. We want them to know that this week – and every week – the FTC is in their corner,