The law does not consider a Merchant Cash Advance (MCA) a loan, so the government loosely regulates MCAs. However, that does not mean MCA providers can bypass laws and be as aggressive as they can in collecting payments from you. The law still requires that MCA providers follow due process and fair business practices when conducting their collections.
Here’s what you can do to seek relief against aggressive MCA collection.
Document unlawful tactics
Even though the law does not consider MCAs as loans and protects them under the Fair Debt Collection Practices Act (FDCPA), laws still prohibit payment collectors from using illegal means to collect payment. MCA collectors cannot issue threats, harass people, impersonate persons of authority or invade your privacy. In addition, they cannot change the terms of your agreement or add fees not part of the initial agreement to collect more than what you owe.
If you experience any of these or other illegal tactics, document what you can.
File a complaint with regulatory bodies
You can file a complaint with the Federal Trade Commission (FTC) or Consumer Financial Protection Bureau (CFPB). If they find evidence of unfair or deceptive practices, the FTC or the CFPB can investigate and act against these MCA providers.
Protect yourself legally
Suppose the MCA provider has become too aggressive, enough to interfere with your life and your business. In that case, you may seek legal counsel who will advise you on legally protecting yourself from these aggressive MCA collectors. As a small business owner, the law provides you with equal protection against unfair and predatory collection practices.