In a recent case against Jonathan Braun and his company RCG Advances, LLC., the Federal Trade Commission (FTC) prevailed on summary judgment. The defendant’s business revolved around the provision of merchant cash advances, a form of financing where small businesses receive upfront lump-sum payments in return for the right to collect future receivables. These financial arrangements typically offer businesses timely access to critical funding. More details about the case can be found here.
The court concluded, however, that Braun and RCG Advances engaged in three sets of deceptive acts and practices. Though the exact nature of the deceptive acts and practices has not been fully disclosed, this verdict signifies the FTC’s increasing focus on potentially undermining business practices in the merchant cash advance industry.
This case follows a trend of increased scrutiny from both federal and state regulators, looking to deter misleading practices and abuse in the merchant cash advance industry. This case should serve as a stark reminder to corporations and legal practitioners of the need to ensure all business practices align with both state and federal laws, and the potential consequences of failing to do so.