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08-11-2017, 02:58 PM #1
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Refusing To Allow Payoff
We have a merchant we are trying to consolidate with several positions. Merchant claims that Expansion refuses to allow another lender to payoff their balance and will not issue a payoff letter.
I cannot verify that what the merchant is telling us is true but I would not be surprised at all if this is true since we have encountered similar issues at other shops.
Anyone have any experience with this issue with Expansion and if this practice -if alleged is true- is even legal?
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08-11-2017, 03:09 PM #2
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In an unregulated industry I guess this is as legal as anything else. In the past funders only accepted payoffs because it was customary or good for their cash flow. But if they really want to keep their customers, they can just refuse to be paid off.
Last edited by MCNetwork; 08-11-2017 at 03:12 PM.
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08-11-2017, 03:25 PM #3
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This may be the case but it's a pretty dumb way to retain clients. If I was the client I would be pissed off at Expansion and would never use their services ever again. Holding someone "hostage" like this may be legal but it's still offensive and bad business practice.
On the other hand, there could be more to this story. I've seen cash companies that won't honor early payment discounts unless the funds come directly from the merchant. This makes perfect sense to me. If there is an early pay discount at stake I could see why. If not, Expansion is trying to make enemies with someone on their books.
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08-11-2017, 03:46 PM #4
I've never seen or heard of that from Expansion.....they have NO PROBLEM getting paid off.
Now what is probably going on, is Expansion offers prepay discounts in their contracts, and the merchant is probably trying to demand prepayment discount, while taking money from another source. Those discounts only apply if paying off yourself.
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08-11-2017, 03:50 PM #5
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Personally I think the merchant may be providing misinformation. I'd be surprised if Expansion is doing what is being claimed.
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08-11-2017, 05:16 PM #6
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American Express does this too
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08-11-2017, 05:41 PM #7
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08-11-2017, 05:48 PM #8
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08-11-2017, 06:36 PM #9
That's why some funds don't even waste time giving them out. 99.97% of the time, they are never used
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08-11-2017, 06:40 PM #10
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Why will they refuse? They can just fund him again tomorrow in another account.
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08-11-2017, 09:26 PM #11
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