Fraud prevention
Alternative business funding has grown fast, and so has the number of companies advertising capital they have no intention of delivering. Most of them run the same play, and it is recognisable in a single sentence.
This page explains the pattern, how to check a company before you hand over documents or money, what each side of a deal should watch for, and how to report a company to us.
No legitimate merchant cash advance requires you to send money before you have a signed agreement and before the funds are in your account.
A merchant cash advance is a purchase of your future receivables. The funder earns on the repayment — which means there is no commercial reason to collect a deposit, premium, or release fee in advance. Where a real advance carries origination or underwriting costs, they are netted out of what lands in your account or built into the payback. They are not wired separately beforehand.
So any request for a security deposit, down payment, insurance payment, or processing fee before funding is the thing to stop on. You do not need to work out whether the rest of the offer is plausible. This single test catches the overwhelming majority of it.
It is a consistent sequence, and knowing it is usually enough to recognise it while it is happening rather than afterwards.
An approval arrives quickly, and the terms look good
Often better than anything else you have been quoted. The attractive offer is the bait, not a mistake.
A payment is requested before funding
Framed as a security deposit, a first payment held in escrow, an insurance premium, or a fee to release the funds.
The payment is pushed to a hard-to-reverse channel
Wire, Zelle, crypto, or a cashier’s check. Cards and ACH can be clawed back, which is exactly why they are avoided.
After payment, conditions multiply
A compliance issue, a second deposit, a new underwriting step. Each one asks for a little more.
Contact stops
The phone number stops working, the domain goes quiet, and the company reappears under a new name.
None of these is conclusive by itself. A company failing all three is telling you something.
A website on its own domain, a verifiable business address, contact details that match, and a company name you can actually find in business records. An operation with no footprint older than a few weeks has not been doing this long under that name.
Check reputation in several places rather than one. A single rating is easy to manufacture or to miss; a pattern across independent sources is much harder to fake in either direction.
A funder that can take a complete application through its own secure portal has built real infrastructure. One that can only accept bank statements over email has not necessarily done so. Email is common in this industry and is not proof of anything on its own — but it is worth asking for a secure option, and worth pausing if none exists.
Outright fraud is the extreme case. Most of what actually costs people money in this industry is bad practice between parties who all know exactly what they are doing — and it looks different depending on which seat you are in.
dealing with a broker or funder
Promises that are not in the contract
Especially "take this deal now and we will get you better terms in a few months." If the renewal or the rate is not written down, it does not exist.
Debits that do not match the agreement
Payments pulled more frequently, or in larger amounts, than the contract specifies.
Fees on top of the agreed debits
Monthly or administrative charges appearing alongside the daily or weekly payment you actually signed for.
Any payment requested before funding
Covered above, and it is the clearest line there is.
taking on a new broker
Large fees charged to the merchant
The broker is already paid a commission by you. Substantial additional fees extracted from the merchant are predatory and the complaint lands at your door.
Stacking
Placing further advances on a merchant already committed elsewhere, frequently in breach of the agreement already in place.
A history of overpromising
Brokers who commit you to terms, renewals, or timelines you never agreed to, then leave you to explain.
choosing which funders to submit to
Backdooring
The funder takes your submission and goes direct to your merchant, cutting you out of a relationship you brought them.
Commission that does not arrive
Paid late, paid short, or not paid at all — and no clear statement showing how it was calculated.
Silent renewals
The funder renews your merchant without telling you, and the residual on an account you originated disappears.
Move quickly — the window for reversing a payment is short, and wires are the hardest to recover. None of the following is legal advice.
Call your bank or card issuer now
Ask specifically about a wire recall or a chargeback. Hours matter.
File the report officially
The FTC at reportfraud.ftc.gov, the FBI’s IC3 at ic3.gov, and your state attorney general.
Keep everything
Emails, texts, the agreement, payment receipts, screenshots, phone numbers. Do not delete the thread.
Protect the account
If you sent statements or account details, speak to your bank about whether the account should be changed.
If a funder or broker has acted fraudulently, tell us. Reports help us understand what is happening in the industry and which patterns are spreading. Be clear on what this is and is not: reports are read privately, and we will not publish a company's name because one report arrived. For anything you want on the public record, a review is the right route — you are the author, it is attributed to your company, and the company you name is notified and can reply.
No. A merchant cash advance is a purchase of future receivables, and the funder makes money on the repayment, not on a fee collected in advance. Where a real advance carries origination or underwriting costs, those are netted out of the amount deposited or built into the payback — they are not wired separately before funding. If a company asks for a security deposit, down payment, insurance payment, or processing fee before you have a signed agreement and before money has reached your account, that request does not match how the product works.
The company presents an approval that looks competitive, then asks for a payment before funding — commonly framed as a deposit, a first payment held in escrow, an insurance premium, or a fee to release the funds. Once the money is sent, the company either delays indefinitely with new conditions or stops responding. The approval was the product being sold; there was never any capital behind it.
Confirm the company has a traceable footprint: a working website on its own domain, a verifiable business address, and contact details that match. Read its reputation across more than one independent source rather than relying on a single rating. Then look at how it wants your application — a company that can take a complete application on its own website has built real infrastructure, while one that only wants bank statements over email has not necessarily done so. None of these is conclusive on its own; a pattern across all three is what matters.
Prefer submitting through the company's own secure portal where one exists. Bank statements identify your account and your cash flow, so every extra copy sitting in an inbox is additional exposure. Email is widespread in this industry and is not itself a sign of fraud, but it is worth asking for a secure upload option and worth hesitating if the company has no way to take an application other than email.
Three patterns recur. Brokers charging the merchant large fees of their own on top of the commission the funder already pays them. Brokers stacking — placing further advances on a merchant who is already committed elsewhere, often against the terms of the existing agreement. And brokers who promise the merchant terms, renewals, or outcomes that nobody has agreed to, which the funder then gets blamed for failing to deliver.
Backdooring — the funder taking a submitted deal and approaching the merchant directly, cutting the broker out of the relationship they brought. Commission that is slow, short, or never paid. And renewals processed with the merchant without telling the broker, so the broker loses the residual on an account they originated.
Anything promised verbally that is absent from the written agreement, especially "take this deal now and we will get you better terms later." Payments debited more often or in larger amounts than the contract specifies. And monthly or administrative fees charged on top of the agreed daily or weekly debits. The contract is the deal; a promise that is not in it is not one.
No. We read every report we receive, but we do not publish reports and we do not label a named company fraudulent on the strength of an allegation we cannot adjudicate. What we do publish is reviews, written and signed by verified brokers and funders about companies they have actually worked with, where the named company is notified and has a right of reply.
Contact your bank or card issuer immediately and ask about a recall or chargeback, since the window is short and wires are hardest to reverse. Report it to the FTC at reportfraud.ftc.gov, to the FBI's IC3 at ic3.gov, and to your state attorney general. Keep every email, text, document, and receipt. Then consider whether your bank account details were exposed and whether the account should be changed.
No. A report submitted here is private. We do not forward it, we do not identify you to the company, and nothing about it is published on the site.