6 Things the FTC Has Done to Crack Down on Predatory MCA Companies

The Agency That Finally Noticed

For years, the MCA industry operated in a regulatory space that no federal agency actively policed. The product was not a loan, so banking regulators had limited jurisdiction. It was not a consumer product, so consumer protection agencies treated it as peripheral. The businesses that suffered were small, the amounts were individually modest by federal standards, and the complaints accumulated in no single place. Then the Federal Trade Commission began to pay attention, and the cases it brought demonstrated what practitioners in this space already knew: the industry’s most aggressive actors were not simply pushing the boundaries of commercial practice. They were violating federal law.

The RCG Advances Action and the Twenty Million Dollar Judgment

The first and most significant action was the FTC’s case against RCG Advances and its operator, Jonathan Braun. The FTC alleged that the defendants deceived small businesses about the terms of their advances, made unauthorized withdrawals exceeding the agreed amounts, required personal guarantees while advertising that none were needed, and enforced confessions of judgment against borrowers who had been misled about the contract terms. In 2024, following a jury trial, the court entered a judgment of over twenty million dollars in monetary relief and civil penalties. Braun was permanently banned from the MCA and debt collection industries. The court described his conduct as exhibiting utter disregard and contempt for consumers, including threats of physical violence directed at business owners who could not pay.

This was not a settlement. It was a trial, a verdict, and a judgment. The FTC litigated the case to conclusion, and the conclusion was unambiguous.

The Permanent Industry Bans

The second action, related to the first, was the imposition of permanent bans. Braun, along with RCG Advances co‑defendant Robert Giardina, was banned from the MCA industry entirely. These are not temporary suspensions. They are lifetime prohibitions, enforced by the court and backed by contempt penalties. The signal this sends to the rest of the industry is that individual operators, not merely corporate entities, can be personally and permanently excluded from the business.

The Forum on Small Business Lending Practices

The third action was educational and precedent‑setting. The FTC hosted a public forum examining small business lending practices, with a dedicated panel on merchant cash advances. The forum explored the structure of MCA products, the risks to small business borrowers, and the consumer protection implications of an industry that had, until that point, received minimal federal scrutiny. The forum did not produce regulation. What it produced was a public record: testimony, data, and analysis that established the FTC’s awareness of the industry’s practices and its intention to act. For funders paying attention, this was the moment the landscape shifted.

Coordination With State Attorneys General

The fourth action was collaborative. The FTC has worked with state attorneys general to address MCA industry practices. New York Attorney General Letitia James secured a seventy‑seven million dollar judgment against three MCA companies for disguising usurious loans as purchases of future receivables. New Jersey’s attorney general filed suit against Yellowstone Capital for violations of the state’s Consumer Fraud Act. These state actions, while not FTC cases, reflect a federal‑state enforcement strategy that is closing the regulatory gap the industry once exploited.

The Gramm‑Leach‑Bliley Act as an Enforcement Tool

The fifth action was legal and strategic. In the RCG Advances case, the FTC used the Gramm‑Leach‑Bliley Act (a statute primarily associated with financial privacy) as the basis for its deception claims. By establishing that MCA providers are financial institutions under the GLB Act, the FTC expanded its enforcement toolkit to cover practices that the FTC Act alone might not have reached. This legal theory, now validated by a jury verdict and a judicial finding, applies to the entire industry, not merely to the defendant in that case.

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The Signal to the Market

The sixth thing the FTC has done is less a specific action than a consequence of all the others. The combined effect of the RCG judgment, the industry bans, the state collaborations, and the GLB Act theory is a signal: the federal government treats predatory MCA practices as a consumer protection matter subject to federal enforcement. For business owners, this signal has practical value. If your funder has engaged in practices similar to those the FTC prosecuted (unauthorized debits, misrepresented terms, threats, deceptive marketing), the legal framework for challenging those practices now exists, and it has been tested in court.

Whether the FTC brings another case tomorrow or next year, the precedent from the cases it has already brought is available to every attorney representing a business owner in an MCA dispute. The industry is no longer unpoliced. The question, for each business owner, is whether to use the tools that policing has produced.