Find the resources you need to understand how consumer protection law impacts your business. But, in the lawsuit, Attorney General James alleges that the Richmond companies' merchant cash advances are in fact illegal, high-interest loans with astronomical and illegal rates. UCC stands for Uniform Commercial Code and these types of liens can be more detrimental to your business than Judgments and COJs. We analyze your current financial situation including your assets and liabilities as well as your current cash flow, allowing us to narrow down our services more specific to what you can afford. Among many other factors to be discussed range anywhere from: When you call our firm,we will want to know how and when your financial hardship began as well as what the current status is, to get a better understanding of what you are experiencing. The merchant cash advance companies often demand that borrowers also pay attorneys' fees, which can be 25 percent to 33 percent of the balance due under a borrower's agreement, documents show. This has been a long journey and you have taken us through it just as you promised. Approach a Merchant Cash Advance Attorney Hire a lawyer skilled in debt settlements and bankruptcy for your MCA debt. In some states, you may be able to fight it if you can prove any of the following: Our Relief Specialists are NOT Paid a Commission so there will be no sales pressure at our law firm. I feel as though a weight has been lifted that burdened me physically and mentally for a long time. During the three-week period, Itria filed suit against 20 small businesses for nonpayment, court records show, most of them outside the state. It is true that a judgment (whether entered by COJ, default, or awarded) can also be used to freeze your incoming receivables, however, most funders do not use judgments to freeze receivables (especially now that COJs in NY are banned against out of state business owners) so filing a UCC lien is a much quicker tool! We have worked hard over the years to earn the reputation we have by giving honest advice to those in need rather than the advice that benefits our bottom line! The repayment was not contingent upon funds coming into the merchant account, causing it to be a loan and therefore the rate charged, which was calculated to be roughly 180%, was in fact deemed usurious and thus the contract was voided. Spot the latest COVID scams, get compliance guidance, and stay up to date on FTC actions during the pandemic. The complaint alleges that these practices violated the FTC Act. Small businesses that need cash must increasingly rely on merchant cash advance lenders members of a little-known industry with almost no government oversight; effective interest rates that can hit 400 percent, according to congressional testimony; and direct access to their customers' bank accounts. Let's break down what this MCA looks like if the provider deducted 10% of your monthly credit card sales until you repaid the full $70,000 based on different revenue amounts: MCA details. Depend on fast response times. 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. This fee is usually expressed as a factor rate. All of our client relationships are One on One. Debt relief is an important decision, and we wont rush you! At The Law Offices of Kenneth H Dramer PC, before we make any recommendations, our debt lawyers, certified debt relief specialists, and paralegals are trained to ask the right questions to find out about your specific situation. A similar situation regarding further recourse to the Merchant Cash Advance purchaser came about in the case Merchant Funding Services, LLC, v. Volunteer Pharmacy Inc. which dealt with the signing of a Confession of Judgment (COJ) in the MCA contract. Five years ago, the merchant cash advance industry financed around $8 billion for small businesses. Merchant Cash Advance Relief Attorneys | The Law Offices of Kenneth H The agreements are enforceable contracts the borrowers have agreed to, lawyers say, but some of the aggressive collection practices, such as visiting borrowers' homes, aren't legal, they contend. You pay for our performance and thats what we do we perform! In addition to potentially saving you money, retaining Dramer Law will save you time as we, Our Lawyers Can Help Whether or Not You Signed a Confession of Judgment. Whether or not a broker was involved, we have helped countless business owners that were sued traditionally or have signed COJs. We work to advance government policies that protect consumers and promote competition. There is no obligation to retain our services. Merchant Cash Advances can be discharged through bankruptcy. 4-6-15, Recently we finished the debt relief program through Dramer Law. CALL NOW FOR A FREE CONSULTATION and one of our advisors will be there to get you started on your path to financial freedom. The FTC's lawsuit alleged that Yellowstone . A leading provider of merchant cash advances used deception to lure small business customers, then regularly withdrew money from their accounts without consent even after the customers had repaid the money they owed, according to a Federal Trade Commission lawsuit. 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. Merchant Cash Advance Lawsuits - Global Legal Law Firm . A leading provider of merchant cash advances used deception to lure small business customers, then regularly withdrew money from their accounts without consent even after the customers had repaid the money they owed, according to a Federal Trade Commission lawsuit. I am able to once again look others in their eyes. Memo from Chair Lina M. Khan to commission staff and commissioners regarding the vision and priorities for the FTC. Specifically, the complaint states that Yellowstone promised that business owners would not be required to provide collateral or be subject to a personal guaranty. 5-26-16, I am very grateful of Michael Sininskys assistance to get through the process. Find legal resources and guidance to understand your business responsibilities and comply with the law. Need an experienced Merchant Cash Advance attorney? You should never settle for less when trying to settle for less! Commissioner Rohit Chopra issued a statement. Office of The Attorney General Freeze your business's bank accounts. We'll get back to you within 5 . The site is secure. Once any third party servicer, debt collector, debt purchaser, collection attorney, foreclosure attorney, etc. receive our Limited Power of Attorney, they are obligated to contact us directly on your behalf. I/we started out with $87,555.84 total debt and ended up paying back $26,020.71. We are so pleased with the results.I know we could not have been successful without their help. The underlying lawsuit involved several commonly litigated issues in the MCA space, and the court unambiguously came down on the side of the MCA company. Proactively addresses potential barriers and issues to prepare clients of required actions and response sets. Court filings in New York state show at least 313 legal actions brought by 98 companies from March 9 to March 20. I can not thank you enough for giving me freedom from debt. The next thing you know, bank accounts and incoming receivables are all frozen leaving the business owner without funds to operate. Thank you for helping me. A Merchant Cash Advance remains one of the most devastating lending instruments available to cash strapped businesses. If revenue dries up and the money stops flowing, merchant cash advance companies can freeze business owners' accounts by filing so-called confessions of judgment. Without truly understanding the risks, how can you make an educated decision as to whether or not debt settlement is going to be right for your business? The .gov means its official. Worked with Michael who was so patient and was very understanding. This means your customers will receive a letter telling them not to pay you but to pay your funder instead!!! "You can't have people freezing assets and demanding payments at a time like this. Suit Filed Against Merchant Cash Advance Companies - PYMNTS.com The best decision we could have made was to begin the debt settlement process. Bronx, NY 11-24-15 review posted on Yelp. Not only is that extremely embarrassing, but without any money coming in, how will you continue to run your business? Overall, though, Im very happy. Mike S. Baldwin, NY 8-3-15, I was so happy to have been represented by the law firm of Kenneth H. Dramer. But keep in mind, this is a moderated blog. Many random phones calls later, we were fortunate to come acrossed Mike, he has explained to us bankruptcy doesnt mean we will lose our house or car. So when small businesses become targets for misleading claims, deceptive tactics, and flat-out intimidation, the FTC takes notice. They are filed without a business' knowledge; merchants often learn about them when they try to pay their employees and find their accounts blocked, the lawyers say. Michael Atleson, Attorney, FTC Division of Advertising Practices, Competition and Consumer Protection Guidance Documents. Making sure that lenders and funders dont deceive business borrowers or engage in servicing abuses is a big priority for the FTC.. The most common arrangements between these companies and small business borrowers aren't technically loans, and therefore their terms and the companies offering them aren't regulated. Dont understand why we didnt do it sooner I guess we were like a lot others going day by day try to be nice by paying off little by little. How to Defend Against Merchant Cash Advance Lawsuits The .gov means its official. I am eternally grateful to you and the rest of Dramer Law. The complaint was filed in the U.S. District Court for the Southern District of New York. If you are an out of state business owner, a confession of judgment can no longer be filed against you in the state of NY. A small-fleet owner received this text from a merchant cash advance provider. Are you getting hounded by collection calls that you want us to take over on your behalf? Arverne, NY 2-6-17, Happy new year! We research all over the internet and called many law firms and layers. Learn more about your rights as a consumer and how to spot and avoid scams. Sincerely, Susan M. Commack, NY 3-27-2018, Thank you very much. The laws regarding the filing of Confession of Judgments (COJ) in New York have recently changed. Merchant Cash Advance Lawsuit - Business Debt Law Group Advance . Merchants are typically required to repay the advances via automatic withdrawals from their bank accounts every day or week. Highly recommended. G.P. An official website of the United States government. Fast funding for your financial goals. There is no obligation to enroll, so dont delay. Merchant Cash Advance companies are aggressive and do not wait to take action when a business defaults on their product. Theyre highly recommended. Rodolfo P. Queens, NY 6-27-2018, Michael Sininsky is professional and responsive in every aspect of all services provided. I didnt feel rushed or like I was being blown off. Thank you again & i hope you dont mind if i touch base with you the future, just to give you updates on how things are going. The FTC alleged that RCG, Giardina, and others stitched together a blanket of misrepresentations that cloaked the true nature of the transaction. The case is further summarized here. Our debt relief representatives will be sure you understand the cost benefits and will be sure to disclose our fees fully. Of course I want to thank you further than what I wrote. Looking for legal documents or records? The New Jersey Attorney General recently announced a settlement in its lawsuit against Yellowstone Capital LLC, its parent company, and various. Is a Merchant Cash Advance Right for Your Business? In all cases, the businesses had stopped paying in March, although Itria Ventures said some of the defaults dated back months before the coronavirus clobbered operations and governments required that many nonessential companies close. Texas attorney Christopher Phillippe thought the deal was simple: Get money up front to pay for litigation costs and pay it back only if he wins in court. Loans are considered absolute and must be paid back with set terms and conditions. However, they often come with high fees and confusing terms. An official website of the United States government. When you stop paying on your merchant cash advances, a merchant cash advance lawsuit will quickly be filed against you and your business. In addition to the $2.7 million financial judgment with RCG and Giardina, the just-announced orderputs them on the Banned Wagon, prohibiting them from engaging in small business financing and debt collection.
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