Court filing

Stipulated final order for permanent injunction and $33 million monetary judgment — FTC v. Biz2Credit (S.D.N.Y.)

Filed March 20, 2024 in FTC v. Biz2credit; one of 3 filings from this case.

Record facts

Court	U.S. District Court for the Southern District of New York
Filed	2024-03-20

U.S. District Court for the Southern District of New York · No. 1:24-cv-02001-JLR · Doc. 9 · 2024-03-20 · Docket on CourtListener

Full text

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
FEDERAL TRADE COMMISSION,
Plaintiff,
v.
BIZ2CREDIT INC., a Delaware corporation, and
ITRIA VENTURES LLC, a Delaware limited
liability company,
Defendants.
Case No. ____________
STIPULATED ORDER FOR
PERMANENT INJUNCTION,
MONETARY JUDGMENT, AND
OTHER RELIEF
Plaintiff, the Federal Trade Commission (“Commission” or “FTC”), filed its Complaint
for Permanent Injunction, Monetary Judgment, and Other Relief (“Complaint”), for a permanent
injunction, monetary relief, and other relief in this matter, pursuant to Sections 13(b) and 19 of
the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b), and 57b, and the COVID-
19 Consumer Protection Act, Pub. L. No. 116-260, 134 Stat. 1182, Title XIV, Section 1401
(“CCPA”). The Commission and Defendants stipulate to the entry of this Stipulated Order for
Permanent Injunction, Monetary Judgment, and Other Relief (“Order”) to resolve all matters in
dispute in this action between them.
1:24-cv-02001 (JLR)
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 1 of 14

2
THEREFORE, IT IS ORDERED as follows:
FINDINGS
1.
This Court has jurisdiction over this matter.
2.
The Complaint charges that Defendants participated in deceptive and unfair acts
or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, and the CCPA, Pub. L. No.
116-260, 134 Stat. 1182, Title XIV, Section 1401 in connection with the advertising, marketing,
and offering of small business financing as part of the Small Business Administration’s (“SBA”)
Paycheck Protection Program.
3.
Defendants neither admit nor deny any of the allegations in the Complaint,
except as specifically stated in this Order. Only for purposes of this action, Defendants admit the
facts necessary to establish jurisdiction.
4.
Defendants waive any claim that they may have under the Equal Access to Justice
Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the date of this Order,
and agree to bear their own costs and attorney fees.
5.
Defendants and the Commission waive all rights to appeal or otherwise challenge
or contest the validity of this Order.
DEFINITIONS
For the purpose of this Order, the following definitions apply:
A.
“Defendants” means Biz2Credit Inc. and Itria Ventures LLC, and their
successors and assigns, individually, collectively, or in any combination.
B.
“Clear(ly) and Conspicuous(ly)” means that a required disclosure is difficult to
miss (i.e., easily noticeable) and easily understandable by ordinary consumers, including in all of
the following ways:
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 2 of 14

1.
In any communication that is solely visual or solely audible, the disclosure
must be made through the same means through which the communication is presented.
In any communication made through both visual and audible means, such as a television
advertisement, the disclosure must be presented simultaneously in both the visual and
audible portions of the communication even if the representation requiring the disclosure
is made in only one means.
2.
A visual disclosure, by its size, contrast, location, the length of time it
appears, and other characteristics, must stand out from any accompanying text or other
visual elements so that it is easily noticed, read, and understood.
3.
An audible disclosure, including by telephone or streaming video, must be
delivered in a volume, speed, and cadence sufficient for ordinary consumers to easily
hear and understand it.
4.
In any communication using an interactive electronic medium, such as the
Internet or software, the disclosure must be unavoidable.
5.
The disclosure must use diction and syntax understandable to ordinary
consumers and must appear in each language in which the representation that requires the
disclosure appears.
6.
The disclosure must comply with these requirements in each medium
through which it is received, including all electronic devices and face-to-face
communications.
7.
The disclosure must not be contradicted or mitigated by, or inconsistent
with, anything else in the communication.
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 3 of 14

8.
When the representation or sales practice targets a specific audience, such
as children, the elderly, or the terminally ill, “ordinary consumers” includes reasonable
members of that group.
C.
“Competent and Reliable Evidence” means tests, analyses, research, studies, or
other evidence based on the expertise of professionals in the relevant area, that (1) have been
conducted and evaluated in an objective manner by qualified persons and (2) are generally
accepted in the profession to yield accurate and reliable results.
ORDER
I.
PROHIBITION AGAINST MISREPRESENTATIONS
IT IS ORDERED that Defendants, Defendants’ officers, agents, employees, and
attorneys, and all other persons in active concert or participation with any of them, who receive
actual notice of this Order, whether acting directly or indirectly, in connection with advertising,
marketing, promoting, distributing, servicing, or offering any extension of credit are permanently
restrained and enjoined from representing, or assisting others in representing, expressly or by
implication:
The amount of time Defendants have taken, will take, or will likely take to
process an application or applications, including but not limited to the amount of
time:
1. to approve, deny, cancel, or withdraw the application(s); or
2. to disburse any funds for which the consumer(s) applied;
A consumer’s odds or likelihood of being approved;
The current status of a consumer’s application, including but not limited to
whether the consumer must provide additional documents or take other steps to
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 4 of 14

complete the application;
If a consumer’s application is incomplete, the additional documents or other
information that the consumer must submit to complete the application;
Any material fact about a government benefit; or
Any other fact material to consumers, such as: the total costs, any material
restrictions, limitations, or conditions; or any material aspect of its performance,
efficacy, nature, or central characteristics;
unless the representation is non-misleading, including that, at the time such representation is
made, Defendants possess and rely upon Competent and Reliable Evidence that substantiates that
the representation is true.
II.
INJUNCTION CONCERNING
APPLICATION PRACTICES

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees,
and attorneys, and all other persons in active concert or participation with any of them, who
receive actual notice of this Order, whether acting directly or indirectly, in connection with
advertising, marketing, promoting, distributing, servicing, or offering any extension of credit, are
permanently restrained and enjoined from:
A.
Failing to allow a consumer to promptly take any of the following actions:
1. withdraw or cancel a pending application;
2. obtain the current status of a pending application; or
3. submit any missing documents or other information the consumer must
provide to complete a pending application.
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 5 of 14

B.
Failing to allow a consumer to take any of the actions listed in Subpart A through the
same medium (such as Internet, telephone, mail, or in-person) the consumer used to
submit an application. Further, at a minimum:
1. For applications submitted over the Internet, Defendants must allow
consumers to take these actions over the same website or web-based
application the consumer used to submit an application.
2. For applications submitted over the telephone, Defendants must provide a
telephone number at which a consumer can withdraw or cancel a pending
application or obtain the current status of a pending application, and assure
that all calls to this number are answered promptly during normal business
hours.
C.
Failing to promptly, and Clearly and Conspicuously, notify a consumer of any missing
documents or other information the consumer must provide to complete a pending
application.
III.
JUDGMENT FOR MONETARY RELIEF
IT IS FURTHER ORDERED that:
A.
Judgment in the amount of Thirty Three Million Dollars ($33,000,000) is entered
in favor of the Commission against Defendants, jointly and severally, as monetary relief.
B.
Defendants are ordered to pay to the Commission Thirty Three Million Dollars
($33,000,000). Such payment must be made within 7 days of entry of this Order by electronic
fund transfer in accordance with instructions previously provided by a representative of the
Commission.
IV.
ADDITIONAL MONETARY PROVISIONS
IT IS FURTHER ORDERED that:
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 6 of 14

Defendants relinquish dominion and all legal and equitable right, title, and interest
in all assets transferred pursuant to this Order and may not seek the return of any assets.

The facts alleged in the Complaint will be taken as true, without further proof, in
any subsequent civil litigation by or on behalf of the Commission, including in a proceeding to
enforce its rights to any payment or monetary judgment pursuant to this Order, such as a
nondischargeability complaint in any bankruptcy case.

The facts alleged in the Complaint establish all elements necessary to sustain an
action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. §
523(a)(2)(A), and this Order will have collateral estoppel effect for such purposes.

Defendants acknowledge that their Taxpayer Identification Numbers (Social
Security Numbers or Employer Identification Numbers), which Defendants must submit to the
Commission, may be used for collecting and reporting on any delinquent amount arising out of
this Order, in accordance with 31 U.S.C. §7701.

All money received by the Commission as monetary relief pursuant to this Order
may be deposited into a fund administered by the Commission or its designee to be used for
consumer relief, such as redress and any attendant expenses for the administration of any redress
fund. If a representative of the Commission decides that direct redress to consumers is wholly or
partially impracticable or money remains after such redress is completed, the Commission may
apply any remaining money for such related relief (including consumer information remedies) as
it determines to be reasonably related to Defendants’ practices alleged in the Complaint. Any
money not used for relief is to be deposited to the U.S. Treasury. Defendants have no right to
challenge any actions the Commission or its representatives may take pursuant to this
Subsection.
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 7 of 14

V.
CUSTOMER INFORMATION
IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees,
and attorneys, and all other persons in active concert or participation with any of them, who
receive actual notice of this Order, whether acting directly or indirectly, are permanently
restrained and enjoined from directly or indirectly failing to provide sufficient customer
information to enable the Commission to efficiently administer consumer redress. If a
representative of the Commission requests in writing any information related to redress,
Defendants must provide it, in the form prescribed by the Commission, within 14 days.
VI. ORDER ACKNOWLEDGMENTS
IT IS FURTHER ORDERED that Defendants obtain acknowledgments of receipt of this
Order:

Each Defendant, within 7 days of entry of this Order, must submit to the
Commission an acknowledgment of receipt of this Order sworn under penalty of perjury.

For 10 years after entry of this Order, each Defendant must deliver a copy of this
Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all
employees having managerial responsibilities for conduct related to the subject matter of the
Order and all agents and representatives who participate in conduct related to the subject matter
of the Order; and (3) any business entity resulting from any change in structure as set forth in the
Section titled Compliance Reporting. Delivery must occur within 7 days of entry of this Order
for current personnel. For all others, delivery must occur before they assume their
responsibilities.

From each individual or entity to which a Defendant delivered a copy of this
Order, that Defendant must obtain, within 30 days, a signed and dated acknowledgment of
receipt of this Order.
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 8 of 14

VII. COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Defendants make timely submissions to the
Commission:

One year after entry of this Order, each Defendant must submit a compliance
report, sworn under penalty of perjury:
1.
Each Defendant must: (a) identify the primary physical, postal, and email
address and telephone number, as designated points of contact, which representatives of
the Commission may use to communicate with Defendant; (b) identify all of that
Defendant’s businesses by all of their names, telephone numbers, and physical, postal,
email, and Internet addresses; (c) describe the activities of each business, including the
goods and services offered, the means of advertising, marketing, and sales, and the
involvement of any other Defendant; (d) describe in detail whether and how that
Defendant is in compliance with each Section of this Order; and (e) provide a copy of
each Order Acknowledgment\ obtained pursuant to this Order, unless previously
submitted to the Commission.

For 10 years after entry of this Order, each Defendant must submit a compliance
notice, sworn under penalty of perjury, within 14 days of any change in the following:
1.
Each Defendant must report any change in: (a) any designated point of
contact; or (b) the structure of any Defendant or any entity that Defendant has any
ownership interest in or controls directly or indirectly that may affect compliance
obligations arising under this Order, including: creation, merger, sale, or dissolution of
the entity or any subsidiary, parent, or affiliate that engages in any acts or practices
subject to this Order.
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 9 of 14

Each Defendant must submit to the Commission notice of the filing of any
bankruptcy petition, insolvency proceeding, or similar proceeding by or against such Defendant
within 14 days of its filing.

Any submission to the Commission required by this Order to be sworn under
penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by
concluding: “I declare under penalty of perjury under the laws of the United States of America
that the foregoing is true and correct. Executed on: _____” and supplying the date, signatory’s
full name, title (if applicable), and signature.

Unless otherwise directed by a Commission representative in writing, all
submissions to the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or
sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement,
Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,
Washington, DC 20580. The subject line must begin: FTC v. Biz2Credit Inc., FTC Matter No.
2123115.

Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 10 of 14

11
VIII.
RECORDKEEPING
IT IS FURTHER ORDERED that Defendants must create certain records for 10 years
after entry of the Order, and retain each such record for 5 years. Specifically, Defendants must
create and retain the following records:
accounting records showing the revenues from all goods or services sold;
personnel records showing, for each person providing services, whether as an
employee or otherwise, that person’s: name; addresses; telephone numbers; job title or position;
dates of service; and (if applicable) the reason for termination;
records of all consumer complaints and refund requests concerning the subject
matter of this Order, whether received directly or indirectly, such as through a third party, and
any response;
all records necessary to demonstrate full compliance with each provision of this
Order, including all submissions to the Commission;
a copy of each unique advertisement or other marketing material making a
representation subject to this Order; and
copies of all subpoenas and other communications with law enforcement, if such
communication relate to Defendants’ compliance with this Order.
IX. COMPLIANCE MONITORING
IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants’ compliance
with this Order:
A.
Within 14 days of receipt of a written request from a representative of the
Commission, each Defendant must: submit additional compliance reports or other requested
information, which must be sworn under penalty of perjury; appear for depositions; and produce
documents for inspection and copying. The Commission is also authorized to obtain discovery,
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 11 of 14

12
without further leave of court, using any of the procedures prescribed by Federal Rules of Civil
Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69.
B.
For matters concerning this Order, the Commission is authorized to communicate
directly with each Defendant. Defendant must permit representatives of the Commission to
interview any employee or other person affiliated with any Defendant who has agreed to such an
interview. The person interviewed may have counsel present.
C.
The Commission may use all other lawful means, including posing, through its
representatives as consumers, suppliers, or other individuals or entities, to Defendants or any
individual or entity affiliated with Defendants, without the necessity of identification or prior
notice. Nothing in this Order limits the Commission’s lawful use of compulsory process,
pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1.
X. RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction, modification, and enforcement of this Order.
SO ORDERED this
day of
, 202__.
_______________________________
UNITED STATES DISTRICT JUDGE
20th
March
4
Hon. Jennifer L. Rochon
All scheduled conferences are canceled.
The Clerk of Court shall enter judgment
in favor of Plaintiff and close the case.
Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 12 of 14

Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 13 of 14

Case 1:24-cv-02001-JLR Document 9 Filed 03/20/24 Page 14 of 14

File and source

File: gov.uscourts.nysd.617679.9.0.pdf
Size: 528,201 bytes
SHA-256: 1d23270027a43745fc59165f5727b7a22d1ed0bb33b9406168a893a3700b7b2f
Our copy: gov.uscourts.nysd.617679.9.0.pdf
Original: archive.org

Stipulated final order for permanent injunction and $33 million monetary judgment — FTC v. Biz2Credit (S.D.N.Y.)

Record facts

Full text

File and source

Related records