A pair of fintech agreed to pay a total of $59 million to settle claims by the Federal Trade Commission that they misled small businesses pursuing funds from the Paycheck Protection Program.
Biz2Credit will pay $33 million to resolve allegations its overpromised on PPP turnaround times. While the company claimed it could process applications, on average, in 10 to 14 business days, the FTC said that average was more than a month.
Womply and CEO Toby Scammell will pay $26 million to address claims they advertised that small businesses could successfully get PPP funding. The FTC found that more than 60% of the company’s applications failed to secure funding. Womply and Scammel failed to fix known technical issue, the agency claimed.
The FTC’s case against Biz2Credit was filed in the U.S. District Court for the Southern District of New York, while the Womply case was filed in the U.S. District Court for the Northern District of California.
Biz2Credit told Banking Dive that the processing times “reflected the experience of legitimate loan applicants.” Noting that it had a thorough vetting process to remove questionable applications.