What federal enforcement against MCA funders actually changed

A collections representative told you the contract is airtight and there is nothing to discuss. Around the same time, a federal court permanently barred one of the industry's better known operators from ever selling another merchant cash advance.

Both things are true at once. Enforcement in this market has been real, specific, and narrower than the headlines suggest. It has ended careers. It has not, on its own, wiped out anybody's balance.

Here is what the cases found, what the agencies can and cannot do, and the handful of items worth checking in your own paperwork because of them.

Why a federal consumer agency reaches a business advance

Most owners assume federal consumer protection stops at the door of a commercial transaction. For some statutes it does. The Fair Debt Collection Practices Act defines a covered debt at 15 U.S.C. 1692a(5) as an obligation incurred primarily for personal, family or household purposes, which leaves a business advance outside it.

Section 5 of the FTC Act is different. At 15 U.S.C. 45(a) it declares unlawful "unfair or deceptive acts or practices in or affecting commerce." Nothing in that sentence narrows it to household purchases. The unfairness standard at 15 U.S.C. 45(n) asks whether a practice causes substantial injury that cannot reasonably be avoided and that is not outweighed by countervailing benefits. That framework has been applied to conduct aimed squarely at small businesses.

The agency signaled interest before it sued anyone. On May 8, 2019 it held a public forum called Strictly Business, with a full panel on merchant cash advances and a long argument about confessions of judgment. Staff followed with a perspective paper on consumer protection risks in small business financing. The cases came after that.

The conduct that drew the complaints

Four patterns run through the filings. If any of them describe your file, that is worth flagging.

Debiting past the payoff. In FTC v. Yellowstone Capital LLC, filed in the Southern District of New York in August 2020 against Yellowstone Capital, Fundry, Yitzhak Stern and Jeffrey Reece, the agency alleged the defendants kept pulling from merchant accounts for days after the purchased amount had been repaid in full, and that refunds of the excess took weeks or months when they arrived.

Funding less than the paper said. The same complaint alleged businesses were told they would receive a stated amount, then had substantial undisclosed fees deducted before the wire went out.

Saying one thing and writing another. The FTC and the New York Attorney General filed together on June 10, 2020 against RCG Advances, LLC, formerly Richmond Capital Group and also doing business as Viceroy Capital Funding and Ram Capital Funding. The complaint alleged that since at least 2015 the defendants told owners no personal guarantee or collateral was required, then wrote both into the contracts, and advertised no upfront fees, then took fees off the top.

Confessions of judgment and threats. That same complaint alleged the defendants required merchants to sign confessions of judgment and used them to obtain uncontested judgments, and that collection practices included threats of physical violence. The FTC added a count under Section 521 of the Gramm-Leach-Bliley Act, 15 U.S.C. 6821, which bars obtaining a customer's bank account information from a financial institution by false or fraudulent statement. That count was unusual, and it mattered for reasons covered below.

What the orders produced

Yellowstone: an April 2021 stipulated order requiring payment of $9,837,000 for redress. In June 2022 the Commission announced it had mailed 7,731 checks totaling more than $9.7 million, and that eligible businesses recovered about 51 percent of what they lost, averaging more than $1,200 per check.

Ram Capital Funding LLC and Tzvi Reich: a January 2022 order requiring $675,000, imposing a permanent ban from the merchant cash advance and debt collection industries, and requiring the defendants to vacate judgments obtained against former customers and release liens on their property.

RCG Advances and Robert Giardina: a June 2022 order returning more than $2.7 million, structured as $1.5 million up front and more than $1.2 million after, plus a permanent industry ban.

Jonathan Braun: in October 2023 a federal court granted the FTC summary judgment, found conduct violating both the FTC Act and the Gramm-Leach-Bliley Act, and entered a permanent injunction barring him from merchant cash advance and debt collection work. In February 2024 the court entered a $20.3 million judgment.

Read the redress figures honestly. Businesses that had been over-debited recovered roughly half, years later, and only because they appeared in the defendant's own records.

The limit the Supreme Court put on federal redress

On April 22, 2021 the Supreme Court decided AMG Capital Management, LLC v. FTC and held unanimously that Section 13(b) of the FTC Act does not authorize the Commission to obtain equitable monetary relief such as restitution or disgorgement. That provision had been the engine behind decades of refunds. The Yellowstone settlement was signed the day before the decision issued.

Money in these cases now has to travel narrower routes: Section 19, rule violations, or a companion statute, which is exactly why the Gramm-Leach-Bliley count against the Richmond entities was worth pleading.

Two further limits matter more to you week to week. Agencies bring cases against patterns of conduct, not individual disputes, so filing a report does not place your account in front of an investigator. And nothing decided so far makes a merchant cash advance unlawful or a balance uncollectible.

The states have carried more weight

New York's Attorney General, who filed alongside the FTC in 2020, kept going in state court. On February 8, 2024, following a September 2023 ruling in the state's favor, the court entered a judgment exceeding $77 million against Richmond Capital Group, Ram Capital Funding, Viceroy Capital Funding and their principals under Executive Law 63(12), with orders to cancel outstanding balances and repay interest and overcharges.

On January 22, 2025 the same office announced a $1.065 billion judgment resolving its case against Yellowstone Capital and the companies it controlled. More than $534 million of that took the form of cancelling every outstanding balance owed by affected businesses, over 18,000 of them nationwide, alongside $16.1 million paid immediately for distribution and a permanent bar from the sales based financing business.

State law reached further because the state pleaded usury: the theory that the agreements were loans wearing a purchase label. That characterization question decides most contested MCA disputes in court, and it is state law that answers it.

If your advance came from a named company

A ban is forward looking. It stops the operator. It does not automatically clear what you owe.

Three things are worth checking. First, whether the order in that case required the defendants to vacate judgments or release liens, because several did. Second, whether a state settlement cancelled balances, because the New York resolutions did exactly that for identified merchants and the Attorney General publishes settlement information for affected businesses. Third, whether your account was sold before the order landed, because a third party buyer that was never a defendant is not bound by terms it never agreed to.

That last point catches people. The letters arriving now often come from a servicer or a debt buyer several steps removed from the funder whose name is on your contract.

Four things to check in your own file

1. Add every debit taken on one advance and compare the total to the purchased amount in the agreement. Withdrawals past payoff are the single most common finding in these cases, and they are visible on your bank statements.
2. Compare the money that actually landed in your account against the funded amount stated in the contract, then find where the difference is disclosed.
3. Look for a confession of judgment or a stipulation signed at closing, and note its date.
4. Compare what the salesperson said about guarantees and fees against what the documents say. Emails and text messages from that period are worth preserving now rather than later.

If something matches, report it to the FTC at ReportFraud.ftc.gov and to your state attorney general's consumer or small business bureau.

A reasonable next step

Enforcement history is useful to you in one concrete way. It tells you which parts of your paperwork deserve a hard second look.

Pull six months of bank statements, total the debits for each advance, and compare the funded amount to the wire. That takes about an hour, and it either surfaces a problem worth raising or it does not. Either answer is better than wondering.