When Kim Talbot started her milling shop in southern Maine, she hoped to land a coveted contract with the federal government to fabricate steel and aluminum machine parts. Not knowing where to start, she did what any inexperienced small business owner could do: she searched Google.
The top search result was, in his eyes, an official-looking webpage. It prominently displayed a logo very similar to that of SAM.gov, the government website where companies must register before pursuing such contracts or grants. The site charged $597 for registrations, no insignificant fees for Talbot and her husband. They had already invested a good part of their savings, some $100,000, in their young family business Muddy River Machining. Still, she assumed it was 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, having missed the fine print revealing this fact under the “Register Online Now” button and the logos resembling that of SAM.gov.
Not only are SAM.gov registrations and annual renewals free, but one-on-one assistance with these processes is also available free of charge through government-funded nonprofit groups across the country.
Even so, many companies with official-sounding names and websites that look like SAM.gov, or sites that might suggest government affiliation, charge hundreds of dollars or more. Several attract unwitting customers like Talbot through Google ads that outrank the legitimate SAM.gov page, illustrating how easy it is to buy visibility on the world’s largest search engine.
“It’s definitely predatory,” Talbot said in a phone interview. “We could have used that money to help with payroll, taxes, insurance or even heating the building.”
The company Talbot paid for, Federal Contractor Registry, denies that its business practices are misleading or predatory, saying it “has always clearly identified itself as a ‘third-party service.'” On its website, after an investigation by NBC News, it replaced the logo closely resembling that of SAM.gov with its own.
While many websites that charge for support for SAM.gov registrations and renewals clearly state that they are not affiliated with the government and simply tout the ease of having forms filled out online by a third party, others are less transparent.
Google removed ads from a number of these sites in response to a request for this article, but later reversed its decision.
“We have strict advertising policies that govern the types of ads and advertisers we allow on our platforms,” Google spokesperson Davis Thompson said in a statement. “If we identify an ad that violates our misrepresentation or government service policy, we remove it immediately.”
Like other online intermediaries, Google is likely protected from liability for third-party content it hosts, including advertisements, by Section 230 of the Communications Decency Act.
A “substantial cottage industry”
The Federal Trade Commission recently proposed a new rule to crack down on the broader problem of government “identity theft,” a phenomenon that has cost consumers billions of dollars and is “widespread and growing.” more harmful, especially for small businesses,” said Christopher Brown. , an attorney in its Marketing Practices Division. The most spoofed government entity 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 recover violators’ money and pursue civil penalties against them, but it still must go through a public hearing period, further review, and a final agency vote. which could take months or years.
Even if the process drags on, the rule “will make a huge difference for consumers,” said Bonnie Patten, executive director of nonprofit consumer advocacy group Truth in Advertising.
As part of that process, Patten’s organization filed comments with the FTC complaining about the Federal Contractors Registry, as well as the Federal Filing, Federal Grants Management Registry and others, calling them “imposters” running “scams” to impersonate the federal government. while failing to adequately disclose that they are private companies.
Before Truth In Advertising filed its lawsuit last summer, Federal Filing displayed the official SAM.gov logo at the very top of its homepage, while revealing down below that it “is not a government agency “, as well as on a separate FAQ page. . The logo has since been removed. Near the top of the site, the company now asks “Why work with the federal government” and “Why SAM?” »
Federal Filing said Truth In Advertising “unfairly targeted us due to presumably bad actors in our field of work.”
Like Federal Contractor Registry and Federal Filing, the Federal Award Management Registration company used Google ads to attract customers. When contacted for comment, he also updated his website, which featured a backdrop of the US Capitol and offered the option to speak with a “federal contractor adviser.”
At the bottom of the homepage was its only disclosure that it was an independent third party, with the following line: “Often the difference between winning and losing a contract is a small mistake. which prevents a correct classification. Trust the experts to be sure your business is properly registered and fully qualified to apply for and win federal contracts.
Following an investigation for this article, the site now provides an enlarged disclosure in bright blue font and no longer displays the Capitol.
This was 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 site is not affiliated with the government and that it is the company’s competitors who are “grossly misrepresenting”.
In an email, Federal Award Management Registration added in part that its representatives inform potential customers over the phone that it is “an independent party and they can perform the SAM registration themselves for free.” .
Even some sites that are more clearly distinguishable from SAM.gov, but populated near or at the top of Google search results for queries, have received complaints from customers who have confused them with the government. Among the many complaints filed against such sites with the non-profit watchdog group Better Business Bureau, one person wrote of a website called US Federal Contractor Registration: “I assumed it was a government web, but it was not.”
The individual said his charity paid $599 for a service he later learned could have been provided for free. In a public response, US Federal Contractor Registration – which states on its homepage that it is a “third party” business, and in small gray-on-gray print at the bottom that it is “not from a government agency” – said he is disclosing this information “clearly”.
Company president and CEO Eric Knellinger said in a lengthy email that “instead of pointing fingers at the USFCR,” NBC News should “review and report system issues and problems. rewards”. [sic] Management [SAM.gov] himself.