A proposed class action lawsuit has been filed against Penn Capital Funding, MapCap Funding and those who run the merchant cash advance (MCA) companies over their alleged use of an apparent loophole in Connecticut law to collect upon unlawful debts and otherwise fraudulently obtain money. These estimates they will give you are known for setting unrealistic expectations as they will make your potential savings out to be more significant than what their actual results tend to yield. We wont post comments that include vulgar messages, personal attacks by name, or offensive terms that target specific people or groups. Merchant cash advance companies like PowerUp aggressively cold-call, email and text small business owners offering quick and easy funding, merchants told NBC News. "The FTC has to seriously look at rules that ban some of the most extortionate clauses in these loan contracts," he said, adding that the FTC is prepared to "go after some of the loan sharks and their lawyers who run lawsuit mills that are filing some of these sham collection actions.". In a return email, he said the firm had decided to stand down for the moment. Our business debt attorneys and arbitrators have successfully worked with many struggling business owners who werent able to qualify for traditional bank funding who were then forced to pledge future receivables to one or more Merchant Cash Advance companies for the capital they needed. Lawsuits are especially great if you used a broker to obtain funding. April 2019: How Mulvaney undid consumer protections from predatory lenders. We can defend you in court if you were sued to buy time and even to successfully defend a judgment from being entered if prove your MCA to be a loan rather than an actual advance. Call us for a free consultation at (866) 890-7337 or click here to send us a message Steps You Can Take to Defend Yourself While a confession of judgment doesn't give you many options, it's not ironclad. Soon after he received the money, the amount of the repayments began rocketing, Runion said. Thats the gist of the agencys 2020 lawsuit against merchant cash advance outfit RCG Advances, LLC and owner Robert Giardina. The merchant cash advance agreements typically allow for these remedies. We are very satisfied with the work and support provided by Michael Sininsky and The Law Offices of Kenneth H. Dramer. A rat was found on the mailbox of a lawyer who represents the customers of merchant cash advance lenders. According to the complaint, the defendants told business owners that no personal guaranty of collateral was required and then put personal collateral requirements in their contracts. Granted, they have specific clauses in their agreements to protect themselves from you closing your merchant account purposely to avoid paying, but if its open and just not receiving funds, nothing should be paid to them if it is a true MCA. In this merchant cash advance FAQ, you'll learn about how they work, the repayment terms you'll want to watch out for and how to protect yourself and your business from predatory practices. Prev Post Looking for legal documents or records?