[EdwinS]

yes, I understand the beauty of the fraud that has been setup by the MCA to shift the blame on the merchant, while they remain some kind of an innocent saints. It is designed so the merchant, who has fallen for the trap, to be the "guilty" one. You obviously did not read my texts above as I already addressed this. This funding call is purposefully/intentionally setup to run this scam by the MCA company. It is designed that if 1) the merchant is a naive fool and falls for the broker advise/directions, then the funding call records it as not saying anything, and so the MCA is "covered", OR 2) if the merchant does slip and say something, the MCA is also covered as they just dump the victim and move on to the next prey.

Yeah, we now know the scam, and how it's setup to protect the MCA and the investors, while shifting the blame somewhere else. That's why it's called a fraud. The fact that you need a recorded funding call with the broker conveniently absent from the call (who is the ONLY person who could have promised the merchant something false), is proof that MCA company is committing fraud. The purpose of the funding call IS to cover the tracks of the MCA fraud. The only guilty entity is the MCA company and the investors hiding behind it for creating this toxic environment.

[BR-Nightmare]

yes, I understand the beauty of the fraud that has been setup by the MCA to shift the blame on the merchant, while they remain some kind of an innocent saints. It is designed so the merchant, who has fallen for the trap, to be the "guilty" one. You obviously did not read my texts above as I already addressed this. This funding call is purposefully/intentionally setup to run this scam by the MCA company. It is designed that if 1) the merchant is a naive fool and falls for the broker advise/directions, then the funding call records it as not saying anything, and so the MCA is "covered", OR 2) if the merchant does slip and say something, the MCA is also covered as they just dump the victim and move on to the next prey.

Yeah, we now know the scam, and how it's setup to protect the MCA and the investors, while shifting the blame somewhere else. That's why it's called a fraud. The fact that you need a recorded funding call with the broker conveniently absent from the call (who is the ONLY person who could have promised the merchant something false), is proof that MCA company is committing fraud. The purpose of the funding call IS to cover the tracks of the MCA fraud. The only guilty entity is the MCA company and the investors hiding behind it for creating this toxic environment.

With all due respect, your looking at this very close minded.

What proof you have that an actual reputable funder is in on this "fraud" you're accusing with no actual validity?

[abfunders]

One of the first things to do when you see fraud is to contact the bank (or ACH pull company) that's behind it. The more complaints that they hear, the more likely they'll cut off the funder. Don't expect to get your money back, as long as there's a signed contract, the bank/company engaging the ACH pull will need to honor it. If they see a pattern of systemic fraud, they might consider cutting them out because they don't want to be seen as an enabled (we hope).

Beyond that, yes, I do believe that funders should be willing to cut off their brokers who are engaging in fraud. Let the merchant prove their case, and every ISO agreement should have a clause that allows them to claw back the commissions if proven that the broker engaged in fraud. The PROBLEM with such a clause is that it can interpreted sometimes too broadly, and regular ISOs might be scared that they will be pulled willy-nilly. Either way, funders should DEFINITELY be able to cancel future commissions and maybe, if proven substantially

Any ideas how to do this? Has any Funder successfully sued a broker before, together with the merchant? The merchant and funder should be working together on this one, and yes, potentially the funder should also be willing to "give a break" (ease payments) to the one who was frauded, but it has to be a case-by-case basis with tons of caution and care because then brokers will start doing it on purpose because they know funders are easy-going about it.

[fundinggrasshopper]

With all due respect, your looking at this very close minded.

What proof you have that an actual reputable funder is in on this "fraud" you're accusing with no actual validity?

BUMP

merchants are getting carrotted left & right,

it seems like the majority of us would be happy to get down to the bottom of which funders are simply collateral damage when a merchant is carrotted, as opposed to the funders that are clearly complicit in the bonk.

from what i've seen, reputable funders are not coming in at 20% ofees & getting paid in full 1.55 factor same week. It is pretty clear when someone got bonked - and i think we all agree that its wrong....the real issue i think we all want a solution for is getting down to the brokers & funders who collaborate to further this kind of fraud.

[fundinggrasshopper]

We've all walked in the ethical grey area to get a big deal funded. This carrotting merchants with a fake LOC is not that - it is fraud, plain & simple.

[Russell]

We've all walked in the ethical grey area to get a big deal funded. This carrotting merchants with a fake LOC is not that - it is fraud, plain & simple.

I think Metropolitan bank must be getting something out of these scams bc companies like Credit ADV and Clover ADV that are straight up scamming merchants every day using Metropolitan bank there's no way the bank doesn't know about it, the merchants should go after the bank since whoever is reaching out to the merchants and doing the scams are using fake names

[Robinhood21]

yes, I understand the beauty of the fraud that has been setup by the MCA to shift the blame on the merchant, while they remain some kind of an innocent saints. It is designed so the merchant, who has fallen for the trap, to be the "guilty" one. You obviously did not read my texts above as I already addressed this. This funding call is purposefully/intentionally setup to run this scam by the MCA company. It is designed that if 1) the merchant is a naive fool and falls for the broker advise/directions, then the funding call records it as not saying anything, and so the MCA is "covered", OR 2) if the merchant does slip and say something, the MCA is also covered as they just dump the victim and move on to the next prey.

Yeah, we now know the scam, and how it's setup to protect the MCA and the investors, while shifting the blame somewhere else. That's why it's called a fraud. The fact that you need a recorded funding call with the broker conveniently absent from the call (who is the ONLY person who could have promised the merchant something false), is proof that MCA company is committing fraud. The purpose of the funding call IS to cover the tracks of the MCA fraud. The only guilty entity is the MCA company and the investors hiding behind it for creating this toxic environment.

The broker shop has a " funding side" the Broker knows exactly whats happening because they are the owes doing the scam....

[sweetleadz]

optimum bank i see it all day !!

[fundinggrasshopper]

optimum bank i see it all day !!

optimum bank is used by many legit funders.

MCB...is also used by many legit funders...as well as some less legit ones...

There is a huge huge huge difference between a funder whos program is solely providing 30-45 day deals to the highest risk merchants, and a funder coming in on a deal at 20% origination where its already premeditated that they will get paid in full the same week. I broker 30-45 day deals all the time. The funders i use are not charging 20% origination. And they definitely are not expecting to be paid in full the same week.

[sweetleadz]

It's all fake. Saw the same thing happen this week. Client got a fake second offer.

Agreed !!!!!!

[syavask]

One of the first things to do when you see fraud is to contact the bank (or ACH pull company) that's behind it. The more complaints that they hear, the more likely they'll cut off the funder. Don't expect to get your money back, as long as there's a signed contract, the bank/company engaging the ACH pull will need to honor it. If they see a pattern of systemic fraud, they might consider cutting them out because they don't want to be seen as an enabled (we hope).

Beyond that, yes, I do believe that funders should be willing to cut off their brokers who are engaging in fraud. Let the merchant prove their case, and every ISO agreement should have a clause that allows them to claw back the commissions if proven that the broker engaged in fraud. The PROBLEM with such a clause is that it can interpreted sometimes too broadly, and regular ISOs might be scared that they will be pulled willy-nilly. Either way, funders should DEFINITELY be able to cancel future commissions and maybe, if proven substantially

Any ideas how to do this? Has any Funder successfully sued a broker before, together with the merchant? The merchant and funder should be working together on this one, and yes, potentially the funder should also be willing to "give a break" (ease payments) to the one who was frauded, but it has to be a case-by-case basis with tons of caution and care because then brokers will start doing it on purpose because they know funders are easy-going about it.

There are technically two types of LOC fraud schemes that exist:

1. where the ISO gets a regular MCA from a legit funder and promises the merchant that if the merchant doesn’t miss any payments within the first month, they will get a LOC or a term loan. In this case there’s no second agreement and this is way better for the merchants because this is still a normal deal with fairly decent term, no 20% fees and no 1.59 crazy rate. If this deal somehow gets funded and the merchant comes back to a funder a month later, stating that they’ve been promised a LOC and the ISO is not taking their calls, reputable legit funder would work out a plan to help the merchant and explain what happened and ,MOST IMPORTANTLY, cut that ISO off. Thats the only way to stop these types of scams from happening: cut those people off and spread the word on Dailyfunder or LinkedIn.

2. but here comes the second type, where the merchant gets 2 contracts: one for a 20 day 1.59 20% fee deal and the second one for a crazy cheap $300k MCA or LOC/term loan. This is mostly done, I’m assuming, by either broker shops who fund on the side or funders who have an in house sales team. So technically there’s no broker between the funder and a client. Everything is done directly which makes it easier for the scumbags. Are there any ways we can stop it? If we think hard enough, we might find something, but the issue is that technically, they haven’t broken a law as they have a binding agreemen with the merchant on that first ****ty deal,, and as they don’t need to build any relationships with brokers, they can close the shop and create a new one.. Again, the only way to avoid it is educate our clients, regardless of your a broker or a funder, expose people that do it and not become a part of the problem..

[syavask]

I’m almost 100% sure that any reputable legit funder wouldn’t knowingly fund a merchant who thinks they’re getting a LOC or a term loan in 30 days, and knowing that the ISO basically tried to set the funder up, it only makes sense to cut them off.

[Inquisitive]

yes, I understand the beauty of the fraud that has been setup by the MCA to shift the blame on the merchant, while they remain some kind of an innocent saints. It is designed so the merchant, who has fallen for the trap, to be the "guilty" one. You obviously did not read my texts above as I already addressed this. This funding call is purposefully/intentionally setup to run this scam by the MCA company. It is designed that if 1) the merchant is a naive fool and falls for the broker advise/directions, then the funding call records it as not saying anything, and so the MCA is "covered", OR 2) if the merchant does slip and say something, the MCA is also covered as they just dump the victim and move on to the next prey.

Yeah, we now know the scam, and how it's setup to protect the MCA and the investors, while shifting the blame somewhere else. That's why it's called a fraud. The fact that you need a recorded funding call with the broker conveniently absent from the call (who is the ONLY person who could have promised the merchant something false), is proof that MCA company is committing fraud. The purpose of the funding call IS to cover the tracks of the MCA fraud. The only guilty entity is the MCA company and the investors hiding behind it for creating this toxic environment.

Take some blame for yourself. You lied to the funder on the funding call. You’re not some innocent guy who didn’t know better and was tricked by the broker. You made an active decision to lie. Lying to people to get your way is bad in any industry. Don’t pretend you’re innocent in what happened to you. Again if you think a broker should be on a funding call then you don’t understand the purpose of the call. It’s for the funder and merchant to get to know each other, make sure the merchant is who they say they are and answer any last questions the underwriter has. There is no reason a broker should be on the call.

[syavask]

Take some blame for yourself. You lied to the funder on the funding call. You’re not some innocent guy who didn’t know better and was tricked by the broker. You made an active decision to lie. Lying to people to get your way is bad in any industry. Don’t pretend you’re innocent in what happened to you. Again if you think a broker should be on a funding call then you don’t understand the purpose of the call. It’s for the funder and merchant to get to know each other, make sure the merchant is who they say they are and answer any last questions the underwriter has. There is no reason a broker should be on the call.

And one very important thing that the funders do during the call is make sure that the merchant understands the terms of the contract and what they've agreed to, answer all the questions the merchant might have and clarify that anything that was promised by anyone has nothing to do with the funder. During my interviews I always make sure that the merchant was not promised anything by straight up asking, if he was, were cutting off the ISO and either killing the deal, or making sure that the merchant is ok with the terms knowing that there’s no LOC or term loan waiting for them. Any funder who doesn’t do that can’t call themselves a real legit funder.. Having broker there would just defeat the purpose of the call..

[EdwinS]

Take some blame for yourself. You lied to the funder on the funding call. You’re not some innocent guy who didn’t know better and was tricked by the broker. You made an active decision to lie. Lying to people to get your way is bad in any industry. Don’t pretend you’re innocent in what happened to you. Again if you think a broker should be on a funding call then you don’t understand the purpose of the call. It’s for the funder and merchant to get to know each other, make sure the merchant is who they say they are and answer any last questions the underwriter has. There is no reason a broker should be on the call.

yes, victim blaming is very easy and convenient, and the beauty of this fraud operation is that it makes it easy to make the victim look like is the one responsible (see, even you are falling for it). The purpose of fraud is to find a victim to fall for it, and in the meantime to cover the tracks of the ones doing the fraud. The purpose of the funding call, is to cover the tracks of the MCA involvement in the fraud. It's a beautiful setup- it is designed to have even professionals like you do not understand you are committing fraud, and support the people doing the fraud while blaming the victim for falling for the trap.

[EdwinS]

And one very important thing that the funders do during the call is make sure that the merchant understands the terms of the contract and what they've agreed to, answer all the questions the merchant might have and clarify that anything that was promised by anyone has nothing to do with the funder. During my interviews I always make sure that the merchant was not promised anything by straight up asking, if he was, were cutting off the ISO and either killing the deal, or making sure that the merchant is ok with the terms knowing that there’s no LOC or term loan waiting for them. Any funder who doesn’t do that can’t call themselves a real legit funder.. Having broker there would just defeat the purpose of the call..

Yes. having the broker on the call defeats the purpose, and the fraud operation would fall apart. It is by design of the fraud, that the broker (the one and only person who could have promised something false to merchant) is left out of the call. That is why he is being left out of the call, so the merchant keeps falling into the trap, while the ones running the scam have their tracks covered.

[EdwinS]

I’m almost 100% sure that any reputable legit funder wouldn’t knowingly fund a merchant who thinks they’re getting a LOC or a term loan in 30 days, and knowing that the ISO basically tried to set the funder up, it only makes sense to cut them off.

Cutting a broker off is not enough. The funder (who is the one financially enabling the broker who promised a fake LOC), is 100% responsible for any and all damages to the merchant for the LOC not coming through.

By the way, what is the responsibility of the "legitimate" funder, for checking the background of the broker? Is it the case that the funder has no responsibility either in that area either? Any ISO broker walking on the street can contact a legitimate funder and bring in deals? Or you think there is some level of responsibility for the "legitimate funder" to check the broker to know who they are?

[fundinggrasshopper]

Cutting a broker off is not enough. The funder (who is the one financially enabling the broker who promised a fake LOC), is 100% responsible for any and all damages to the merchant for the LOC not coming through.

You are missing the forest for the trees. read syavask's comment.

legit funders are not collaborating with brokers engaging in this fraud, because they don't need to.

the brokers & funders collaborating on this fraud technically are all separate - however the "funder" knows the merchant is being carrotted, bc the broker either told them, or implied it. its good money - the broker makes good commission on the 20% fees, and the funder gets paid in full at effectively a 2.0 factor within a week or two.

when you have a good grasp on how this fraud is actually done in real time you can prepare your merchants to be on the lookout for it. but you also will see why these guys do it - its easy money if you don't have a conscious.

[syavask]

Cutting a broker off is not enough. The funder (who is the one financially enabling the broker who promised a fake LOC), is 100% responsible for any and all damages to the merchant for the LOC not coming through.

By the way, what is the responsibility of the "legitimate" funder, for checking the background of the broker? Is it the case that the funder has no responsibility either in that area either? Any ISO broker walking on the street can contact a legitimate funder and bring in deals? Or you think there is some level of responsibility for the "legitimate funder" to check the broker to know who they are?

I'm curious, are you even from the MCA space? First, this scam is mostly done by broker shops who fund themselves on the side or shady funders who have and inhouse sales team and who no one knows about. There's no broker in the middle to lie, it's all done directly and everyone involved is connected in which scenario obv funder is fully responsible..

And as I said before, any reputable funder does a background check on the ISO before signing them up, but it's not like you can only scam people if you have ****ty background as some people never get caught. We use funding calls to clarify everything and explain to the merchant what they've agreed signing our contract. If he decides to lie to us and comes back in a month saying that we promised him something, it's fully on them and the ISO. You can't blame a funder who knew nothing about this.. If you were hurt by someone in the industry, don't blame the game, blame the player- company who scammed you.

[MichaelP]

The evolution of this thread has really been something to see. It started with a statement that everyone can and did get behind. Edwin could have probably even recruited some broker/funder soldiers alike to fight for his new cause. He has since become pretty unlikeable and taken a hard line stance on the sole purpose of a funding call being to aid in fraud???

There are indeed unethical funders who are taking part in this scam alongside the brokers, but having the broker on the funding call would not stop these folks from committing their fraud.

[syavask]

You are missing the forest for the trees. read syavask's comment.

legit funders are not collaborating with brokers engaging in this fraud, because they don't need to.

the brokers & funders collaborating on this fraud technically are all separate - however the "funder" knows the merchant is being carrotted, bc the broker either told them, or implied it. its good money - the broker makes good commission on the 20% fees, and the funder gets paid in full at effectively a 2.0 factor within a week or two.

when you have a good grasp on how this fraud is actually done in real time you can prepare your merchants to be on the lookout for it. but you also will see why these guys do it - its easy money if you don't have a conscious.

I'm actually pretty sure that everyone who does this type of scam is connected and they all work together.. i can't imagine any legit clean ISO working with these funders, but i might be wrong.. we'll never know how they operate exactly and we can only do so much to stop it..

[fundinggrasshopper]

I'm actually pretty sure that everyone who does this type of scam is connected and they all work together.

im more than pretty sure...

[sweetleadz]

Are they still around ????