Businesses use Google ads to attract small businesses to free federal assistance offers

Businesses use Google ads to attract small businesses to free federal assistance offers

When Kim Talbot opened her milling shop in southern Maine, she hoped to land a coveted contract with the federal government to manufacture steel and aluminum machine parts. Without knowing where to start, she did what any inexperienced small business owner would do: she googled.

In their eyes, the best search result was an official-looking website. It clearly displayed a logo very similar to that of SAM.gov, the government website where companies must register before receiving any such contracts or grants. The site charged $597 for registrations, not an insignificant fee for Talbot and her husband. They had already put a good portion of their life savings, about $100,000, into their fledgling, family-run business, Muddy River Machining. Nevertheless, she considered it necessary and paid the amount.

It was only later that the Talbots realized that this site was in no way affiliated with the federal government, after overlooking the smaller print disclosing this fact under the “Register Online Now” button and logos resembling those of SAM.gov .

Not only are SAM.gov registrations and annual renewals free, but personal assistance with these processes is available for free through government-funded nonprofit groups across the country.

Even so, many companies with official-sounding names and websites resembling SAM.gov, or websites that might indicate government affiliation, charge hundreds of dollars or more. Several attract ignorant customers like Talbot through Google ads that outperform the legitimate SAM.gov page, illustrating the ease of buying visibility on the world’s largest search engine.

Kim Talbot.
Kim Talbot.Courtesy of Kim Talbot

“It’s definitely predatory,” Talbot said in a phone interview. “We could have used that money to help with payroll, taxes, insurance or even heat the building.”

The company Talbot pays, Federal Contractor Registry, denies that its business practices are deceptive or predatory and claims that it “has always clearly identified itself as a ‘third party'”. On its website, following a request from NBC News, it replaced the logo closely resembling that of SAM.gov with its own.

While many sites that charge fees for assisting with SAM.gov registrations and renewals clearly state that they are not affiliated with the government and simply advertise that a third party can fill out the online forms, others are less transparent .

Google removed the ads for a number of these websites in response to a request for this article, but later reversed its decision.

“We have strict ad policies that govern the types of ads and advertisers we allow on our platforms,” ​​Google spokesman Davis Thompson said in a statement. “If we discover an ad that violates our misrepresentation or government service policies, we remove it immediately.”

Like other online intermediaries, Google is likely shielded from liability for third-party content, including ads, that it hosts under Section 230 of the Communications Decency Act.

A “substantial cottage industry”

The Federal Trade Commission recently proposed a new rule to address the broader problem of government “impersonation,” a phenomenon that has cost consumers billions of dollars and is “very pervasive and increasingly harmful, especially to small businesses.” , said Christopher Brown, an attorney in its marketing practices department. The most imitated government agency is the Social Security Administration, followed by Medicare, US Customs and Border Protection, the FTC, and then the IRS.

The FTC’s proposed rule would allow it to reclaim money from violators and impose civil penalties on them, but it still has to go through a public hearing period, further reviews and a final vote by the agency, which could take months or years.

Following a request from NBC News, the Federal Contractor Registry updated its website, replacing a logo very similar to SAM.gov's (left) with its own (right).
Following a request from NBC News, the Federal Contractor Registry updated its website, replacing a logo very similar to SAM.gov’s (left) with its own (right).
The official SAM.gov logo for the government website where companies must register before receiving contracts or grants.
The official SAM.gov logo for the government website where companies must register before receiving contracts or grants. SAM.gov

Even if the process drags on, the rule “would make a huge difference to consumers,” said Bonnie Patten, executive director of nonprofit consumer advocacy group Truth in Advertising.

As part of this process, Patten’s organization has filed comments with the FTC complaining about the Federal Contractor Registry, as well as Federal Filing, Federal Award Management Registration, and others, calling them “crooks” engaged in “fraud” to present themselves as federal government while not adequately disclosing that they are private companies.

Before Truth In Advertising filed its complaint last summer, Federal Filing displayed the official SAM.gov logo at the top of its home page and stated below that it is “not a government agency” and on a separate FAQ page. The logo has since been removed. At the top of the website, the company now asks “Why work with the federal government” and “Why SAM?”.

Federal Filing said that Truth In Advertising is “unfairly targeting us because we are suspected bad actors in our industry.”

Like the Federal Contractor Registry and Federal Filing, Federal Award Management Registration used Google ads to attract customers. When asked for comment, it also updated its website, which had shown a backdrop of the US Capitol and offered an opportunity to speak with a “federal treaty adviser.”

At the bottom of the home page was the only indication that it was an independent third party, with the accompanying line: “Often the difference between landing and losing a contract is a small error that prevents a proper filing. Trust the experts so you can be confident your business is properly registered and able to apply for and win federal contracts.”

Following a request for this article, the website now offers an enlarged disclosure in light blue font and no longer shows the Capitol.

This is due to “ongoing changes” to the site, company owner Brad Anderson said over the phone. He added that “99.9%” of customers understand that his website is not affiliated with the government and that it is the company’s competitors who are “grossly misrepresenting themselves”.

In an email, Federal Award Management Registration added, in part, that its representatives phone potential customers to inform them that they are “an independent party and that they could complete the SAM registration themselves at no cost.”

Even some sites that are more distinct from SAM.gov but rank near or at the top of Google results for searches have received complaints from customers mistaking them for the government. Among the many complaints filed against such websites with the non-profit monitoring group Better Business Bureau, one person wrote about a website called US Federal Contractor Registration: “I assumed it was a government website, but it wasn’t. “

The person said their charity paid $599 for a service they later learned could have been done for free. In a public response, the US Federal Contractor Registration – which states on its homepage that it is a “third party” firm and in small gray writing at the bottom that it is “not a government agency” – said it “clearly presents” this information. open minded.

The company’s President and CEO, Eric Knellinger, said in a lengthy email that NBC News “rather than pointing fingers” at USFCR should “look at and report on the issues and problems with the System for Awards.” [sic] administration [SAM.gov] even.”

As these companies continue to thrive without meaningful intervention, more and more are popping up.

“That’s why a significant cottage industry has developed,” said Ken Bloch, president of the Association of Procurement Technical Assistance Centers, which provides free help with SAM.gov registrations and annual renewals. “Many of the companies that are affected are very small. They’re mom and pop businesses – maybe five or ten people.”

Free, “superior” alternatives

Federal Contractor Registry, Federal Filing and Federal Award Management Registration all said they make it clear to their customers that they are not affiliated with the government and that they have never misrepresented their companies. Each likened their services to tax returns, a cumbersome and complex process that many people pay professionals to complete when they can do it themselves for free.

But the Small Business Administration urges people not to spend their valuable resources on these services when there are so many free alternatives. The SBA has numerous district offices and business centers nationwide dedicated to supporting women, veterans and other specific groups and offering free SAM.gov registration and renewal assistance.

“Save those resources to do other back-end work that can be overwhelming for small business owners, like bookkeeping and annual taxes,” said Bibi Hidalgo, associate administrator for government contracts and business development at SBA. “There’s no need to spend your hard-earned contract awards on it.”

“There’s no need to spend your hard-earned contract awards on it.”

Bibi Hidalgo, Small Business Administration Assistant Administrator for Public Procurement and Business Development.

The US General Services Administration, which operates SAM.gov, said in an emailed statement that “no third-party company should ever, for any reason, embody SAM.gov,” noting that it “takes appropriate action when we be made aware of such impersonation.” It did not respond to requests to clarify what such a measure entailed.

Talbot has contacted their local Procurement Technical Assistance Center and plans to use their free support in the future. She said the help she received for free was “superior” to the services she paid hundreds of dollars for.

Until the FTC’s proposed rule goes into effect, Truth in Advertising’s Patten worries that more and more small business owners like Talbot will spend their money unnecessarily on SAM.gov registrations and renewals. She expects that new, prominently displayed Google ads will contribute to the problem.

“As much as we’d hope Google doesn’t take money from scammers,” she said, “we’ve seen time and time again that things don’t really seem to work.”

Leave a Reply

Your email address will not be published. Required fields are marked *