[B2csp]

Hey Guys,

Just wanted to throw something out there and see how the industry feels as whole.

Over the last 6-8 months our team has been getting an increase in horror stories being told by merchants about how people from our industry are doing shady activities from promising a line of credit if they take an offer and pay it back right away at a 1.50 then disconnecting the line or blocking the merchant's number; funding a merchant with 2 or 3 positions within a week or 2 despite the fact that the merchant might have qualified for much larger and better deals; lying about how a reverse works until the merchant only gets a small portion of his approved amount then not answering the phone and keep pushing the weekly deposits on their account, etc. I'm sure there's more BS tactics out there.

I've been in the industry for over a decade and in the past every now and then you'd get a story about it. Now its becoming an uncomfortably common refrain and good business owners with strong revenues and businesses are either defaulting from these tactics or are left with such bad taste that they will never do Revenue Based Financing again despite the fact that with the right capital they would have tremendous growth. Some businesses get it so bad that they go out of business altogether.

Secondly, we are seeing merchants getting called and backdoored after sending a file to large A-B paper funder. Some A paper funders used to have a tight grip on what their teams were doing with their data and they caught, fired or arrested people who backdoored client's information. Now, we are seeing even the larger companies losing that control over the information entrusted to them and clients being called the same day these files go out to them with accurate info.

This brief text wont make any real impact if this is not a reality for most of you, but if it is, we need to start collectively deciding what is allowed to happen in the industry and it can only happen with the real ISO's who are looking to make a difference as well as the funding companies. Does our industry need some regulations? If we dont decide what is acceptable or not we will have a regulatory government body step in eventually. The industry has a lot of money, it is getting bigger and catching the eyes of larger guys in finance who are joining. By allowing all these shady tactics to happen and treating the industry as the wild west, its only a matter of time. Unless we decide how to fix our own industry.

How do we do that? Thats the big question! I wonder what your thoughts are. Anyone have similar thoughts or experience or am I just saying nonsense here?

[simonwein12]

The LOC scam is getting out of hand. Funders should team up and stop working with anyone caught doing that. We also need to push back against funders involved in backdooring. Keep in mind, some big-name funders straight up claim control over deals after 30 days in their ISO agreements.. Some people are shocked when i tell them.

[14Funded99]

The LOC scam is getting out of hand. Funders should team up and stop working with anyone caught doing that. We also need to push back against funders involved in backdooring. Keep in mind, some big-name funders straight up claim control over deals after 30 days in their ISO agreements.. Some people are shocked when i tell them.

you're absolutely right. they literally all say it in their iso agreements and no one catches it. they basically own your files its complete trash. half the tier a guys legit tell you their own follow up or renewals department gets to try and contact your client for 6 months then maybe we can resubmit after. Also the LOC scams are crazy. I personally think anyone dumb enough to fall for it should not be given future funding anyway. where is the common sense on the business owner? all these little half assed brokers cant sell a deal like a real experienced businessman so they all bait and switch people or straight up lie. its the dirtbags like that who are getting the SBFA and other government entities to try and regulate everything.

[B2csp]

you're absolutely right. they literally all say it in their iso agreements and no one catches it. they basically own your files its complete trash. half the tier a guys legit tell you their own follow up or renewals department gets to try and contact your client for 6 months then maybe we can resubmit after. Also the LOC scams are crazy. I personally think anyone dumb enough to fall for it should not be given future funding anyway. where is the common sense on the business owner? all these little half assed brokers cant sell a deal like a real experienced businessman so they all bait and switch people or straight up lie. its the dirtbags like that who are getting the SBFA and other government entities to try and regulate everything.

Exactly. Unless people in the industry take charge in a dignified way to decide who to work with and who not to work with, we are doomed to get regulated in a way that will most likely not be beneficial to the growth of the industry. If that happens it will defeat the purpose of the industry existing as an alternative space for more accessible capital in the first place. Both ISOs and Funders have a role to play to put order in the industry.

As far as the clients of an ISO being considered as a "referral" and is owned by the lender after submission is ridiculous. We always make sure that language is not on our ISO agreement if we catch it.

[fundinggrasshopper]

you're absolutely right. they literally all say it in their iso agreements and no one catches it. they basically own your files its complete trash. half the tier a guys legit tell you their own follow up or renewals department gets to try and contact your client for 6 months then maybe we can resubmit after.

most companies that collect personal data, such as SmartTV companies like Roku or LG, or cell phone manufacturers like Samsung, providers like verizon & at&t, social media companies, even companies like the New York Times, Youtube (google), Amazon to their stores & customers, even your freaking BANK - all of these companies state in their TOS that by signing you consent to them selling your personal data to 3rd parties. these companies make it EXTREMELY DIFFICULT to opt out of such consent, let alone even FIND this verbiage in their terms of service.

EVERY SINGLE FUNDING APPLICATION in modern MCA has this type of language in the application disclosure....

So its not surprising this kind of language is in ISO agreements as well. Not all of them, but many of them. Not surprising in the slightest...anyone who is surprised or think that its messed up, in my opinion, has an outdated understanding of what "privacy" is in the modern day age of the internet.

solution? doesn't really exist. Only strategies you can put into place to try and limit the amount of your deals that get backdoored.
dont include contact information
dont send your best files to funders that YOU KNOW have this kind of verbiage in their iso agreement.
dont send your files to "funders" that YOU KNOW are SUPER BROKERS!!!

even when you do this, if someone at a funder you sent the deal to, wants to backdoor your deal....,theyre gonna find the number, and theyre gonna reach out!

gotta keep your best client close and tell them that other people WILL UNDOUBTABLE be reaching out.

This is unpreventable in our business. You can accept this, ask yourself why, and strategize damage control, or hop on this forum and complain your files being backdoored.