Updated: Dec 30, 2021
This elaborate scam has victimized several funders, broker shops, and merchants. We started working on this story several months ago. Here is what we have found, One person sells the leads on the Daily Funder to unsuspecting brokers, the broker runs the leads and gets deals funded by the unsuspecting funder, then they call them to start a debt settlement that ultimately screws the funder and the unsuspecting merchant. We were able to connect the dots by listening to the call recorded by our informant in October, and by the emails sent. The practice is a fraudulent practice that we discovered. The aftermath is the merchants that fell victim to this scam will often lose their businesses and cost jobs in those communities. The scam also hurts the party that bought the leads as they discover the leads bought cause clawbacks. No one wins in this situation. They charge the merchant fees, and set them up for failure. "Walter" the agent from Creditted instructed the merchant in the recording to stop paying his funder. There are two known businesses that fell victim to the scam, one in Alabama and the other is in Wisconsin. As we continue this investigation, we will update this story.
(Metroplex Warning- Video contains some strong language- viewer discretion is advised)
10/15/21 (investigation started 3/20/2020) Alert
Merchant Cash Advance, Mislead Merchants Into Default, Funder Alert, Consumer Alert
We all hear stories about how someone promised something that did not happen, in the case of this business owner, whom we will refer to as "The Merchant" the advice that has been dispensed to him is advice that wrecks businesses, and cost jobs in our community. Our economy is already fragile with the cost of inflation and the uncertainty of our futures. Business owners that survived the pandemic do not need malicious advice that can destroy them at any time, but right now many are fragile.
The Merchant in this case had come back to apply for funding after a few months because the first time he was at Metromedia Funding Solutions he was disqualified for funding because he had already funded within the last thirty days. Metromedia's policy is commonplace when someone has funded a business, no others should until the thirtieth day has passed unless the applicant can show beyond a reasonable doubt to underwriters that the funding does not put the business in jeopardy of default or cause undue hardship to both funders and the business.
This applicant showed us that not all ISO (Independent Sales Organizations) shops run with this policy. In fact, it showed that there are a few ISO shops out there that do not care what happened to the business after they receive a commission check. But this one that was on the phone in the video had crossed a line that should never be crossed, they clearly are collecting funds from merchants and sitting on them (allegedly ) then after they have raised enough money in what they called an "escrow account" they would approach a funder that was probably suffering backlash from investors and partners, all in hopes that they would take a settlement and then pocket the difference. Do you want to know who wins in that situation? Here are two clues, it is not The Merchant and it is not The Funder, it's the party doing the smooth-talking on the other end of the line.
What Happens When Merchants Run Out Of Money? The Merchant May Be Scared Of Their Futures.
If you are a merchant that is reading this, no matter what happens, do not default. You may be thinking, well, if payments bounce I am already defaulting, and you are, but believe it or not, the funders want to hear from you. All funders inside the Metromedia Funding Solutions network share a common practice, communication is key, it is always better to contact them before payments bounce and try discussing with them what is going on and what your plan is to follow through and fix it. Granted, there may be late fees with some funders, but they would rather hear from you before it becomes a problem, and they remember that when you need funding in the future.
IN ALL CASES THESE RULES SHOULD APPLY TO EVERYONE, BUT THERE ARE FOLKS NOT FOLLOWING THEM...
STAY IN COMMUNICATION with your funder and your broker that sold you the funding, remember there is always someone that will promise something that THEY cannot deliver, educate yourself. Communication can stop funders from filing default over a misunderstanding, you have to think about how you would react if someone owed you money and dodged your calls.
NEVER initiate a stop payment on a funder, as this practice could land you in instant default status with many funders, and not only get your bank froze up but, could land you in court, you have to remember Merchant Cash Advances are purchase agreements and it is your responsibility to deliver the funds to them.
DO NOT TAKE ON FUNDING TO PAY FOR FUNDING If you have watched The Funded Project, you may recall the theory of "falling in reverse" when Rick discussed how the cash flow and usage of funds are so important to understand BEFORE you take funding.
IF YOU SIGNED DOCS TO PAY BACK A CERTAIN AMOUNT DO NOT TRY TO WEASEL YOUR WAY OUT OF IT. It may seem harsh but if it was good enough to fund with it is good enough to pay back, many people in the industry know each other, and there is a centralized communication system where they can see feedback from their peers. As we all know that a Merchant Cash Advance is not something that builds the same kind of credit you purchase a home or vehicle with, it has its own system that they know who is good for repayment and who is not. We also want to make it known if you are reading this and feel that you have done it wrong with your funder, you can change that at any given time by picking up the phone and calling them if you dodged them for years, perhaps apologize, and remember many times they are regular normal folks like me and you, not demigods.
What Happens To Defaults? What Happens If You Did Not Mean To Default?
No one (ligament) enters a Merchant Cash Advance with the intent to default, but not every story in life has a fairy tale ending. The pandemic taught the industry that sometimes, it is not your fault. Metromedia Funding Solutions has a select few funders that still review a prior defaulted deal, but Metromedia Funding Solutions also requires that you show proof of communication and cooperation with payment arrangments in place before a defaulted file can be considered for funding, if you are reading this and are not sure what to do or who to call the staff at Metromedia Funding Solutions will be happy to connect you with that funder to start working on repayment and on education on how to use the product correctly so that does not happen to you again. If you are in that situation DO NOT and I am going to repeat DO NOT use a negotiation service that tries to negotiate a settlement, not only do they make the most of the money that you are paying for them, but it also places your business on a "do not fund" list tat becomes difficult to overcome for funding in the future at any funding company or bank. The sales tactics they use claiming the funder is "OK with it" rest assured they are not OK with it
What happens when the voice on the other end of the phone mislead me into something that hurt my business?
There are a few things you can do, but first, be honest with yourself on the question I am going to ask right now. Did you read your funding docs and ask your agent questions before signing them? If you did not, it is tough to place blame because in cases that can be proven that they tricked you into an advance with an empty promise you are liable for the burden of proof in such a claim. Get it in writing and not only get it but read it too! Does the broker organization have a social presence that you can see real interactions? From a glance when you go to the scammer's Facebook page or TicToc, it may appear they have a following but if you dig in and there is not one name that looks real, no comments or likes, you should probably get away from them. This is 2021, if they are not found on social media, chances are better than likely that could be a scam. We know that is not a 100% thing either, and know that some folks have to start somewhere. SKIP THE G00GLE ADS, especially those above the maps section on a desktop search because they all bought their way there, the ones that earned their way there are usually more resourceful and established. Be Very VERY careful on Craigslist, Snapchat, and especially LinkedIn. I would be willing to bet that you did not know there are over 1,000 people selling LinkedIn profiles contact emails and calculated interests on platforms like Fivver. We also advise brokers and agents working in any business-to-business sales organization to check their lists to the ones they sell on Fivver because they are usually the same thing, at least that was our last experience, more on that coming soon.
Real Talk, We really need to make sure that you know this, or we did not complete our mission here...
I have seen business owners send off bank statements to random guys calling them from countries across the world, not knowing that there is in many cases a local agent in their area. Your business is a part of you, we know you would not go to an HVAC repairman to fix your transmission, and sadly the ones calling from countries are often guilty of adding fees to your funding approvals and have been known to make empty promises, it is usually a safer bet to find an organization that is within a few hundred miles of your current location in case you need to meet them in person. We will do whatever is possible to help the industry clean these scab cheats out of the funding industry but cannot do it alone. If you are still in question, The Funded Project has a helpline opening on November 1st, 2021 that will be staffed with its own councilors that will provide you a list of companies that you can call upon and have been vetted to do as they say they will do, the link for that is here as Metromedia sometimes is busy and you need to handle it now (rest assured we work some crazy hours so you can always be here). I am always available by email or text (fastest) or by phone and try to contact everyone as fast as possible and I always will reply., so will my staff.
The CALLOUT to our friends in this industry - we need you! The CALLOUT to businesses, - We need you too!
We wish we could say that the story from the video was isolated but we know that if they called The Merchant in the video that they are calling other businesses, and that scares us, and it should scare you too. The industry has been working in pockets of small groups to find these offenders and take them out of the industry, Rick believes that we can get further if we work together towards the shared goal, but that becomes difficult because everyone is worried that the offenders may victimize their shop with tactics like similar domains and emails, we know that a few have gone to jail for going as far as stealing from offices that they visit. (no worries, we have security and they won't come to my office.) With all kidding aside, we know they are out there, and any time we see them we will try to stop them. We cannot fix anything working against each other Teamwork makes the dream work.
Wish to add to the story or have information that can help catch the offenders? A business owner that has a story to tell, and you don't know where to turn to? Feel free to report news tips anonymously at https://www.madisoncountynewsnetwork.com/submit-a-news-tip