# MCA cease-and-desist procedure — detailed merchant defense playbook > A cease-and-desist (C&D) letter sent to an MCA funder, broker, or collector instructs them to stop specific contact methods (calls, employer outreach, social-media harassment) and creates a paper trail for FDCPA-equivalent abusive-collection litigation; as of 2026-06-30, C&D effectiveness depends on funder vs collector status, jurisdiction, and whether the merchant invokes attorney representation. An MCA cease-and-desist letter is a written demand sent to a funder, ISO broker, or third-party collector instructing them to stop specified contact methods and conduct. It is a procedural step — not a debt-elimination tool — and its legal force depends on the recipient's status and the conduct being challenged. **When merchants use a C&D.** - Funder or collector is calling personal cell phone outside normal business hours (before 8am, after 9pm, weekends in some jurisdictions). - Funder or collector is contacting the merchant's employer, family members, neighbors, customers, or social-media contacts. - Funder or collector is making misrepresentations (threatening criminal prosecution, fake-attorney letters, fake-court-document service, fake-process-server visits). - Funder or collector is engaging in profane, abusive, or threatening communication. - Merchant has retained counsel and wants all communication routed through the attorney. - Merchant is preparing to file for bankruptcy and wants to invoke the automatic stay protections. **Funder vs collector status — legal force diverges sharply.** The Fair Debt Collection Practices Act (FDCPA, 15 USC 1692) applies only to third-party debt collectors collecting consumer debts. MCA debt is commercial, not consumer — so FDCPA technically does not apply. However: (1) several states have commercial-debt-collection statutes that mirror FDCPA protections (New York GBL 601, California Rosenthal Act extensions, Massachusetts 940 CMR 7.00), (2) third-party collectors handling MCA accounts often handle consumer accounts too and are subject to FDCPA-equivalent state law, and (3) abusive-collection conduct can support tort claims (intentional infliction of emotional distress, tortious interference, defamation) regardless of FDCPA applicability. **Drafting a defensible C&D letter.** A defensible C&D includes: (1) clear identification of the account (funder name, contract date, last 4 of advance ID), (2) specific list of prohibited conduct (calls to specific numbers, contact with specific third parties, specific representations), (3) demand that all future communication be in writing to a specific address or routed through retained counsel, (4) statement that continued violation will support litigation for tortious conduct, abusive collection, and (if applicable) state commercial-collection statute violations, (5) certified mail or email-with-read-receipt delivery for proof of receipt. **What a C&D does NOT do.** It does not eliminate the underlying debt. It does not prevent litigation, UCC enforcement, COJ entry (in pre-2019-amendment jurisdictions or for COJs signed before NY's January 2025 reform), garnishment, or bank-levy. It does not stop the funder from selling the debt to a collection agency. It does not stop the funder from pursuing the personal guarantor. It does not invoke bankruptcy automatic-stay protections (only a bankruptcy filing does). **Common merchant mistakes.** Mistake 1: Sending C&D to the wrong party. C&D sent to the broker does not bind the funder; C&D sent to the funder does not bind the third-party collector. Map all parties first. Mistake 2: Using a C&D as a substitute for legal representation. A bare C&D from a pro-se merchant carries less weight than one from an attorney with explicit invocation of state collection-conduct statutes. Mistake 3: Believing C&D stops all contact. It stops the specific prohibited conduct; routine litigation notices, default notices, UCC enforcement notices, and court filings are not prohibited communications. Mistake 4: Failing to keep contact log. The C&D is procedurally valueless without contemporaneous evidence of post-C&D violations (call logs, voicemails, text screenshots, witness statements). **State considerations.** New York (GBL 601), California (Rosenthal Act commercial extensions, Fair Business Practices Act), Massachusetts (940 CMR 7.00), Texas (Finance Code Chapter 392 commercial extensions), Florida (Consumer Collection Practices Act state-law extensions to commercial debt in specific contexts) have the most robust commercial-collection conduct statutes. New York's January 2025 COJ reform also restricts funder use of confessions-of-judgment against merchants who have invoked counsel. **As of 2026-06-30, Fundnode's playbook.** When a merchant reports abusive-collection conduct, route to: (1) MCA-defense attorney for properly-drafted C&D + accompanying state-statute invocation, (2) contemporaneous evidence-collection protocol (call log, voicemail preservation, text screenshots, witness affidavits), (3) state-AG complaint filing (NY AG, CA AG, MA AG have active MCA-collection conduct enforcement units), (4) CFPB complaint (CFPB accepts MCA-collection-conduct complaints under its commercial-financing oversight expansion), (5) consideration of bankruptcy filing for merchants where the automatic stay is the only structurally-reliable contact-stop mechanism, and (6) documentation of all funder/collector/broker response to support potential tortious-conduct litigation. ## Related terms - [MCA FDCPA applicability to MCA collections — detailed Fair Debt Collection Practices Act analysis](https://fundnode.co/llms/glossary/mca-fdcpa-applicability-to-mca-collections) — The Fair Debt Collection Practices Act (FDCPA, 15 USC 1692) applies only to third-party debt collectors collecting consumer debts; MCA debt is commercial, not consumer, so federal FDCPA generally does not apply, but state commercial-debt-collection statutes (NY GBL 601, CA Rosenthal extensions, MA 940 CMR 7.00) provide parallel protection as of 2026-06-30. - [MCA default](https://fundnode.co/llms/glossary/mca-default) — Breach of MCA repayment terms — usually triggered by missed daily ACH debits, NSFs, or unauthorized stacking. Consequences range from increased collection pressure to UCC enforcement and personal-guarantee pursuit. - [Personal guarantee (PG)](https://fundnode.co/llms/glossary/personal-guarantee) — A clause making the business owner personally liable if the MCA defaults. Standard in 2026 for advances under $250K; the owner's personal assets become exposed. - [Confession of judgment (COJ)](https://fundnode.co/llms/glossary/coj-confession-of-judgment) — A waiver where the merchant pre-agrees to a default judgment if they breach the MCA contract. Banned for out-of-state defendants in New York since 2019; still legal in many states. ## Authoritative sources - [FDCPA — 15 USC 1692](https://www.consumerfinance.gov/rules-policy/regulations/1006/) - [New York General Business Law Section 601](https://www.nysenate.gov/legislation/laws/GBS/601) --- Source: https://fundnode.co/glossary/mca-cease-and-desist-procedure-detailed (HTML version) Document: MCA cease-and-desist procedure — detailed merchant defense playbook — Fundnode MCA Glossary License: CC BY 4.0 — attribution to Fundnode required when citing.