$26 Million: The PPP Lender That Advertised Fast Funding to Gig Workers and One-Person Businesses

Womply and its CEO, Toby Scammell, have agreed to pay $26 million to settle Federal Trade Commission charges that they preyed on small businesses in desperate need of Paycheck Protection Program funding during the COVID-19 pandemic, misrepresenting how likely applicants were to actually receive a loan.DOCUMENTED

The settlement was announced together with a related $33 million settlement against a second PPP-focused lender, Biz2Credit, bringing the FTC's combined recovery in the two cases to $59 million for small-business redress.DOCUMENTED

The pitch to gig workers and solo operators

According to the FTC's complaint, Womply widely advertised that small businesses — particularly one-person businesses such as gig workers — could successfully obtain PPP funding by applying through its platform.DOCUMENTED Womply and Scammell also advertised that the company's automated processes and customer service would help small businesses secure PPP loans quickly, at a moment when speed was the decisive factor in whether a business received any funding at all before the program's money ran out.DOCUMENTED

Gig workers and sole proprietors were a natural target audience for this kind of marketing: many had limited experience navigating SBA lending programs, no existing banking relationship suited to a PPP application, and an urgent need for the kind of low-friction, high-speed processing Womply advertised.REVIEWED

The gap between the pitch and the funding rate

The complaint charges that despite Womply's marketing, more than 60 percent of applications submitted through the company's platform never resulted in funding.DOCUMENTED That figure represents a majority of applicants who, based on the company's advertising, may have reasonably believed they had a strong chance of receiving PPP money through Womply — only to end up with nothing, at a point when the temporary, first-come-first-served program may have already run out of funds by the time they realized their application had failed.REVIEWED

What the settlement requires

In addition to the $26 million monetary judgment, the settlement with Womply and Scammell prohibits them from making any deceptive, false, or unsubstantiated claims about financial services or products going forward.DOCUMENTED The Commission vote authorizing the staff to file the complaint and proposed stipulated order in both the Womply and Biz2Credit matters was 3-0.DOCUMENTED

More than 60 percent of applications submitted through Womply's platform never resulted in funding, according to the FTC's complaint — a majority failure rate for a product marketed as a reliable path to emergency small-business funding.

A pattern across two PPP lenders

The FTC's decision to announce the Womply and Biz2Credit settlements together reflected a shared underlying pattern across both companies: each advertised fast, reliable access to PPP funding to attract small-business applicants during a period of acute financial urgency, and each is alleged to have fallen well short of that promise in a way that cost some small businesses their only realistic shot at emergency federal aid.REVIEWED Because PPP funding was allocated on a strict first-come, first-served basis, a company's marketing about processing speed and approval likelihood functioned as more than ordinary sales puffery — for many small businesses, it was the deciding factor in choosing which lender to trust with their one shot at applying before the money disappeared.REVIEWED

Why the case remains relevant today

Although the Paycheck Protection Program itself ended years before this settlement, the Womply case remains instructive for how the FTC evaluates marketing claims made to small businesses about access to any government benefit or financial product: a claim about funding likelihood or processing speed must be substantiated by the company's actual track record, not simply asserted because it makes for compelling advertising copy.REVIEWED The $59 million combined recovery across the Womply and Biz2Credit cases remains among the larger small-business redress amounts the FTC has secured in a single enforcement action, underscoring how significant the harm can be when deceptive marketing intersects with a genuine emergency need.REVIEWED

The particular vulnerability of gig workers and sole proprietors

Womply's marketing emphasis on one-person businesses and gig workers reflects a segment of the small-business population that often lacks the kind of ongoing banking relationship — a business checking account with an established lender, a dedicated business credit history — that made PPP applications more straightforward for larger, more established companies.REVIEWED Gig workers filing as sole proprietors frequently had to rely on newer, less-established intermediary platforms like Womply specifically because traditional banks were slower to build PPP application infrastructure for this category of borrower, leaving a gap in the market that a company promising fast, reliable processing could fill — accurately or not.REVIEWED

That dynamic means the population most exposed to Womply's alleged overpromising was also, in many cases, the population with the least financial cushion to absorb the loss of a PPP application that went nowhere — small, thin-margin businesses for whom the emergency funding was often the difference between staying open and closing during a period of severely reduced revenue.REVIEWED

What the record judgment signals

The $59 million combined judgment across Womply and Biz2Credit reflects an unusually large recovery for a case centered on marketing claims rather than outright theft — most of the money at issue moved through legitimate loan-application channels rather than being diverted directly by the defendants. That distinction matters for how the settlement is best understood: the harm the FTC identified was not that Womply pocketed application fees without providing any service, but that the company's marketing created expectations about funding likelihood and speed that a majority of applicants never saw met, at a moment when an accurate expectation might have led them to seek funding through a different channel while the program still had money remaining.REVIEWED

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