[k lion]

Hello funders. Hope you are thriving in these crazy times. I have a question for you. My partner and I have 8 years of experience, and we opened a new shop. We are kicking ass, but there is a scenario that keeps popping up. We have gotten declines on several files that are very fundable. The response I've gotten from funders on these files is "Declined. Merchant got duped by CREDIT ADVANCE or duped by UNITED" These guys scammed the merchant by getting them to take say, $20,000 and then we will get you a term loan for $500,000. The merchant signs, and instead of wiring $20,000, they wire them $13,000 at a 1.55 with $7,000 in fees. Then they immediately file a default lien. Now, these great files can't get funded, even though some have a zero balance letter and copies of the transaction paying paying the funder back in full. My question is WHO WILL FUND THESE GUYS WHO GOT SCAMMED?

[BR-Nightmare]

Hello funders. Hope you are thriving in these crazy times. I have a question for you. My partner and I have 8 years of experience, and we opened a new shop. We are kicking ass, but there is a scenario that keeps popping up. We have gotten declines on several files that are very fundable. The response I've gotten from funders on these files is "Declined. Merchant got duped by CREDIT ADVANCE or duped by UNITED" These guys scammed the merchant by getting them to take say, $20,000 and then we will get you a term loan for $500,000. The merchant signs, and instead of wiring $20,000, they wire them $13,000 at a 1.55 with $7,000 in fees. Then they immediately file a default lien. Now, these great files can't get funded, even though some have a zero balance letter and copies of the transaction paying paying the funder back in full. My question is WHO WILL FUND THESE GUYS WHO GOT SCAMMED?

No real funder will.

Only those that do short term micros may touch it.

[Steven_O]

No real funder will.

Only those that do short term micros may touch it.

Uuf... this sounds like a lawyers dream waiting happen.

Not based on credit.
Not based on revenue (which is why this industry exists)
Based on your association and who you got scammed with.

Sounds to me, like the funders rejecting these files dont want the feds digging in their books when these scam companies finally get busted.

Just calling it how I see it.

[BR-Nightmare]

Uuf... this sounds like a lawyers dream waiting happen.

Not based on credit.
Not based on revenue (which is why this industry exists)
Based on your association and who you got scammed with.

Sounds to me, like the funders rejecting these files dont want the feds digging in their books when these scam companies finally get busted.

Just calling it how I see it.

That's far beyond as to why.

Merchant's having those types of scams happen raises red flags not just for the Funder, but for the bank as well.

The banks have been closing accounts left and right when Merchants get funded or their debits begin. Especially from these short term high debit "funders." Banks also monitor chargebacks and blocks and if a specific originator has high amounts of chargeback or blocks, they may just outright freeze the account.

This is happening more and more causing an increase in defaults (of cause it was not on purpose)

This makes this difficult if we come across a file that has had this occur. Many funders do not want to take that risk. It's as simple as that.

[k lion]

Yup. You nailed it. At some point it's going to ruin our business

[k lion]

Yes. And I understand that, and I don't expect my funders to fund **** files. It's something that I've seen a lot lately. And, I mean a lot. Merchants who look fundable all of a sudden get promised a term loan, only to find out these scumbags put them on datamerch after taking a small advance, give them 11 or 12 grand, charge $8,000 in fees. Some pay it off with proof, gave the money back, and still are on data merch. Pretty ugly. They are screwed. I will keep posting names of these companies until they are exposed. I have no tolerance for criminals. And, I agree with you. At some point the feds are going to get involved.

[k lion]

Steven_O Thats an interesting way of looking at it. Thanks. It happened over the course of three days. Over and over.This makes me look bad to my funders who I've dealt with for years.

[UptownFund]

We will fund once these guys are out as long as there's another prior position in the file.

We keep tabs on the different names united,putnam,octon etc.
If we feel comfortable that the merchant understands how bad the deal they took was we will give an offer as if the scam never happened.