Yellowstone Capital is one of the companies I’ve written about regarding Merchant Cash Advance loans.
Well, things are wrapping up in the FTC action against the company. The Federal Trade Commission has just announced, Yellowstone Capital, a provider of merchant cash advances, will pay more than $9.8 million to settle Federal Trade Commission charges that it took money from businesses’ bank accounts without permission and deceived them about the amount of financing business owners would receive and other features of its financing products.
The FTC goes on to say, “Merchant cash advances are a form of financing in which a company provides money to a small business up front in exchange for a larger amount repaid through daily automatic payments. In this case, the FTC alleged that Yellowstone and its owners continued withdrawing money from businesses’ bank accounts for days after their balance had been repaid. The complaint alleged that these unauthorized withdrawals left businesses without needed cash and that any refunds from the company could take weeks or months.
The complaint also alleged that, in many cases, Yellowstone misled businesses about the amount of funding they would actually receive, and defendants’ requirements that consumers pledge collateral and make personal guarantees.
Under the terms of the settlement, Yellowstone, Fundry Inc., Yitzhak (Isaac) Stern, and Jeffrey Reece will be required to surrender $9,837,000 to the FTC to be used in providing refunds to affected businesses.
In addition, the settlement permanently prohibits the defendants from misleading consumers about the terms of their financing, including the amount and timing of any fees and whether business owners are required to be personally liable for the financing. The defendants will also be prohibited from making withdrawals from consumers’ bank accounts without their express informed consent.
In connection with other claims they make to consumers, the defendants will be required to clearly and conspicuously disclose any fees that will be paid by consumers for the financing, as well as the actual amount of money that a consumer will receive after the fees are charged. They will also be required to monitor any marketers or funding companies that work on their behalf, to investigate complaints against them, and to terminate their relationship with any such company that fails to abide by the settlement’s requirements.”
- Plastic Pandemic: US Credit Card Debt Surges Nearly 20% in Q1 2021! - May 12, 2023
- The IRS Resumes Collections Notices: What You Need to Know Before It’s Too Late - May 12, 2023
- How Can I Deal With Payday Loan Debt? - May 12, 2023