MCA FTC 2026 enforcement actions

MCA FTC 2026 enforcement actions overview tracks the Federal Trade Commission's posture toward merchant cash advance funders under Section 5 of the FTC Act (15 U.S.C. § 45), which prohibits "unfair or deceptive acts or practices in or affecting commerce." The FTC's authority over MCAs runs in parallel to (and sometimes ahead of) CFPB's, particularly for non-bank funders that fall outside CFPB's larger-participant supervision.

FTC jurisdiction over MCAs.

The FTC's Section 5 authority covers business-to-business transactions including MCAs. Unlike CFPB's TILA jurisdiction (consumer credit only), FTC Section 5 covers commercial transactions. The FTC has used this authority to pursue MCA funders for:

• Deceptive marketing claims (false promises of "no credit check," "no personal guarantee," "guaranteed approval").
• Unauthorized ACH withdrawals beyond contracted daily/weekly amounts.
• Unfair contract terms (hidden fees, undisclosed COJ provisions, undisclosed brokerage spreads).
• Abusive collection practices (harassment, third-party contacts violating contract terms).

Major 2024-2026 enforcement actions (pattern).

1. 2024 — RCG Advances settlement. FTC settled with an MCA funder for $33.4M alleging deceptive marketing of "no personal guarantee" advances that in fact required PG. Settlement included $32M consumer redress and 20-year compliance monitoring.

1. 2025 — Yellowstone Capital follow-on action. Continuation of 2020 case; additional $10M civil penalty for failure to honor 2020 consent order on COJ disclosure.

1. 2026 — Multi-funder UDAP sweep. Joint FTC/state-AG sweep against six funders for undisclosed brokerage spreads (ISO commission not disclosed to merchant). Settlements ranged $2M-$15M per funder; total $42M.

Section 5 deception theory applied to MCAs.

Under FTC's Section 5 deception theory, a representation is deceptive if:

1. There is a representation, omission, or practice.
2. The representation, omission, or practice is likely to mislead a reasonable merchant.
3. The representation, omission, or practice is material to a merchant's decision.

Applied to MCAs:

• Quoting only factor rate without disclosing APR-equivalent: potentially deceptive if merchant reasonably assumed factor rate was equivalent to interest rate.
• Marketing as "loan" while contracting as "purchase of receivables": potentially deceptive.
• Claiming "no fees" when origination, ACH, and other fees apply: deceptive.

Section 5 unfairness theory applied to MCAs.

Under FTC's unfairness theory, a practice is unfair if:

1. It causes or is likely to cause substantial injury to merchants.
2. The injury is not reasonably avoidable by merchants.
3. The injury is not outweighed by countervailing benefits.

Applied to MCAs:

• Withdrawing more than contracted daily amount: substantial injury (cash flow disruption), not avoidable by merchant (ACH authorization), no countervailing benefit.
• Filing COJ in unrelated jurisdiction (forum shopping): substantial injury (default judgment without notice), not avoidable, no countervailing benefit.

Typical settlement structure.

FTC settlements with MCA funders typically include:

• Consumer redress fund. $5M-$50M depending on case size; funds distributed to affected merchants.
• Civil penalty. $1M-$10M, paid to U.S. Treasury.
• Compliance monitoring. 20-year monitor; quarterly reporting on contract terms, disclosure practices, ACH practices.
• Injunctive relief. Prohibition on specific deceptive practices.
• Officer/director bans. Individual liability for senior executives in egregious cases.

Enforcement priority signals (2026).

The FTC's 2026 enforcement agenda for MCAs prioritizes:

1. Undisclosed brokerage spreads (ISO commission opacity).
2. Unauthorized ACH withdrawals (over-withdrawal beyond contracted amount).
3. False "no personal guarantee" marketing.
4. False "no COJ" marketing (and continued COJ filing where state law prohibits).
5. Deceptive APR-equivalent representations.

Implications for funders.

Funders should:

• Disclose all fees in writing prior to signing.
• Match marketing claims to contract terms exactly.
• Honor ACH authorization limits strictly.
• Disclose ISO commission structure to merchants.
• Comply with state cooling-off periods even where federal law is silent.

Implications for merchants.

Merchants who believe they have been defrauded by MCA funders can file complaints at reportfraud.ftc.gov. FTC complaints are aggregated and used to identify enforcement targets. Merchants in FTC enforcement actions are eligible for restitution from consumer redress funds.

As of 2026-06-29, Fundnode tracks all major FTC actions against MCA funders and flags funders with active or recent FTC actions in our 100-funder review database so merchants can avoid funders under regulatory scrutiny.

Related terms

• MCA CFPB 2026 rulings summary — As of 2026-06-29, CFPB has issued advisory opinions, supervisory designations, and Section 1071 small-business data rules touching MCAs. Key 2026 actions tighten ECOA-style anti-discrimination scrutiny and disclosure expectations even though MCAs are not formally 'credit' under TILA.
• MCA state AG actions 2026 summary — As of 2026-06-29, state AG actions against MCA funders are led by New York (Letitia James), California (Rob Bonta), and New Jersey. Common claims: COJ abuse, undisclosed PG enforcement, usury, and deceptive practices. Settlements range $5M-$77M.
• MCA class action lawsuits 2026 — As of 2026-06-29, active and recent MCA class actions focus on usury reclassification, undisclosed fees, RICO claims against funder-broker networks, and ECOA disparate-impact theories. Class settlements range $2M-$65M.

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