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.
Blog Posts Tagged with Credit and Finance
As a business owner, you’ve seen the headlines about financial relief that may be available to some companies through the Small Business Administration (SBA). But you’ve also heard about scammers who extract a grain of truth from the news and distort it in an effort to cheat small businesses. Now more than ever it’s critical for small business owners to go straight to the source for accurate information about what’s happening at the SBA. And that source, of course, is the Small Business Administration’s dedicated page, sba.gov/coronavirus.
It’s an unprecedented time. But even in the midst of monumental change, the FTC’s commitment to its consumer protection mission remains constant. Here’s a statement from Chairman Simons about the ongoing work of the Bureau of Consumer Protection:
The practice is called piggybacking, but it’s not child’s play. It’s where a person with iffy credit pays a credit repair company to be listed as an authorized user on the account of someone with good credit – even though they don’t actually have access. The idea is that the person with bad credit can inflate their own credit score and get the money-saving benefits of better credit by “piggybacking” on the credit of a stranger. That’s how a Denver-based business pitched its services to cash-strapped consumers.
As an essential engine of the American economy, small business has a big impact. But where can small business owners turn for the capital they need to grow? Traditional lenders are one option, but the “It’s a Wonderful Life” image of George Bailey at the Building & Loan may not reflect reality. New online options may broaden the availability of credit, but they also raise some consumer protection concerns.
Top picks, star ratings, in-depth reviews. Many consumers don’t buy anything without consulting third-party review sites or checking out the opinions of other customers. But how often are those ratings the product of buying and selling between the “independent” site and companies willing to pay for better play? And are those reviews really from satisfied customers or are they from employees acting on instructions to stuff the ballot box with five-star ratings?
When people report scams, deceptive practices, or identity theft, the FTC and other members of the Consumer Sentinel Network regularly use that data for law enforcement purposes. But now we’re examining the information in innovative and interactive ways – and you can, too. The FTC just produced a video featuring Paul Witt, the Bureau of Consumer Protection’s Sultan of Stats.
They say hindsight is 20/20, but what about foresight? We’re not ones to prognosticate, but a look at notable FTC cases and initiatives from the past year suggests some topics likely to be top of mind in months to come. Here is a non-exhaustive list of issues in our 2019 rearview mirror and likely visible through the 2020 windshield.
Everyone wants to save money at the pump. And no one wants to cut fuel costs more than companies – including many small businesses – that are in the trucking industry or have company cars. The FTC just filed a complaint alleging that Georgia-based FleetCor Technologies has made misleading representations in pitching its “Fuelman” and co-branded fuel cards to businesses around the country.
The FTC and its law enforcement partners are waging the war against illegal telemarketing on many fronts. An amended complaint in a pending case filed by the FTC and the Ohio Attorney General seeks to hold an additional adversary responsible for violations of the law: Globex Telecom, a VoIP service provider that allegedly played a key role in subjecting consumers to a barrage of illegal calls for a bogus credit card interest rate reduction scheme.
They’re called “notices,” but do consumers really notice them? Convening at 9:00 Eastern Time this morning, October 29th, Consumers and Class Action Notices: An FTC Workshop will take a closer look at what the research – including a recent FTC staff report – tells us about class action notices, refund methods, claims rates, and related issues.
“He just emailed you! You caught his eye and now he’s expressed interest in you... Could he be the one?”
Every spring at colleges across the country, many graduates receive a diploma in their hand – and an albatross around their neck. The burden of student loan debt weighs heavily on American families. And given the pressures on cash-strapped employees, businesses say they’re paying a price in productivity.
The first rule of credit repair is that no credit repair company can remove accurate and timely negative information from someone’s credit report. For credit repair companies that would claim otherwise, there’s CROA – the Credit Repair Organizations Act. It makes it illegal for credit repair companies to lie about what they can do to clear up a clouded credit report, or charge upfront fees before they do the job they promised to do.
The term “FinTech” covers a lot of topics central to the FTC’s consumer protection mission – lending, payment systems, data security, privacy, and truth in advertising, to name just a few. So where can businesses go for resources on how established consumer protection standards apply in this emerging marketplace? FinTech-related materials have a new home in the Business Center: a dedicated FinTech page.
It’s time to get up to speed and down to business. Strictly Business: An FTC Forum on Small Business Financing begins at 8:30 ET today, Wednesday, May 8th. Just in time for National Small Business Week, the half-day workshop will focus on the online marketplace for small business financing.
Where do entrepreneurs go if they’re long on ideas, but short on capital? In their short history, crowdfunding platforms have often been the financial sparkplug that ignites the engine of innovation. But some campaigners promote zealously and deliver zilch. According to the FTC, a company raised over $800,000 in four crowdfunding campaigns for a high-tech backpack and other items, but used a large portion of the money on personal expenses.
Whether you’re starting a business or trying to grow one, there’s one thing you need to take it to the next level: capital. Entrepreneurs look to traditional lenders, of course, but they’re also turning to the online marketplace to find small business financing. What types of products are available? What are the benefits and the consumer protection considerations?
“There is nothing new under the sun.” It’s from the Book of Ecclesiastes and who are we to disagree? So even when innovative products enter the market – for example, new platforms offering financial services – fundamental consumer protection principles remain constant. And as the FTC’s $3.85 million settlement with Avant, LLC, demonstrates, that includes representations and practices related to online lending.
Is there anything you can’t get delivered to your front door? (And yes, home renovators will attest you can even get a front door delivered to your front door.) The burgeoning subscription model can offer convenience to customers, but only if companies honor established consumer protection principles.