MCA Scams and Predatory Lending: How to Identify and Avoid Them

There is a spectrum of conduct in the MCA industry. At one end are lenders who price expensively but disclose costs honestly. At the other end are lenders who commit outright fraud and use collection tactics that cross clear legal lines.

The Difference Between Expensive and Predatory

Predatory lending involves actively deceiving borrowers about cost or terms, refusing to honor contractual obligations while enforcing the borrower's obligations, and using collection tactics that violate the law.

Double-Funding Fraud

Double-funding occurs when a lender or broker arranges multiple advances on the same receivables without disclosing the existence of other funding to subsequent lenders. Double-funding involving material misrepresentations may constitute wire fraud under federal law.

How to Report MCA Fraud

Report to the FTC at reportfraud.ftc.gov, the CFPB at consumerfinance.gov/complaint, your state attorney general's office, and the FBI's IC3 at ic3.gov for fraud involving electronic communications.

Frequently Asked Questions

How do I know if my MCA situation involves fraud or just bad terms? Fraud generally involves intentional misrepresentation of material facts. If you were told something materially different from what the contract says, you may have fraud or regulatory violation claims.

This article is for educational purposes only and does not constitute legal or financial advice.