Business Blog

Since the beginning of the COVID-19 crisis, the FTC has released dozens of warning letters against people trying to make an illegal buck off the Coronavirus. More than a month in, it seems like a good time to look back at what’s happened. If you follow this blog, you’ll know these have been busy weeks – with advice about spotting the many scams we’re all facing, news of the warning letters sent on a wide range of scams, and some enforcement actions filed.

FTC staff just sent letters to 45 more companies making COVID-19 prevention, treatment, or cure claims. There’s a lot to cover in this post, but it’s indicative of the breadth of questionable representations conveyed to consumers in response to the coronavirus pandemic.

If you’re a business owner, you may be planning to apply for a loan through the SBA’s Paycheck Protection Program (PPP) or Economic Injury Disaster Loans (EIDL) program. These programs recently got hundreds of billions of dollars in new funding. But, while you’re focused on getting a loan, scammers may be focused on you: hoping to trick you into giving them sensitive business information, like your bank account numbers, employees’ Social Security numbers, and even your money.
 

As part of its regulatory review, the FTC announced earlier this year Information Security and Financial Institutions: An FTC Workshop to Examine the Safeguards Rule. If the Safeguards Rule is of interest to you or your clients, you’ll want to know about three new developments.

FTC staff just sent 21 more warning letters to companies that have used allegedly unsubstantiated coronavirus prevention and treatment claims to promote products and services. Many of the latest letters focus on questionable representations for high doses of vitamins, intravenous treatments, ozone, and purported stem cell therapies.

Trend-conscious buyers want the latest styles ASAP and online retailer Fashion Nova reinforced those expectations by promising “Fast Shipping,” “2-Day Shipping,” and “Expect Your Items Quick!” But according to the FTC, the California company’s shipment delays violated the Mail, Internet, or Telephone Order Merchandise Rule and left consumers haute under the collar. The $9.3 million settlement is the largest ever in a case of its kind.

Some things have changed in the rent-to-own business, but a $175 million proposed settlement with Progressive Leasing reminds companies that bedrock consumer protection principles apply, especially the fundamental proposition that deceiving people about cost strikes at the heart of the FTC Act. Not in the rent-to-own industry? Not so fast. The case offers compliance pointers for your company, too.

“Oh, my achin’ . . . .” It’s a common refrain for many older Americans and others who experience chronic pain. Some businesses respond with ads heavy on puffed-up promises, but light on the scientific evidence necessary to support serious health claims. That’s the FTC’s allegation against a company that sold a pill called Isoprex. The complaint also challenges the undisclosed use of compensated friends and family as purported consumer endorsers.

For small businesses, there’s never been a time when “business as usual” has been so unusual. With many companies facing coronavirus-related challenges, the FTC has tips for business owners – and for those offering small business financing – about navigating today’s uncharted financial waters.