WASHINGTON—The federal government is accusing one lender of making physical threats and even claiming it would claim certain borrowers were child molesters if debts weren’t paid.
In a newly filed amended complaint, the Federal Trade Commission is alleging merchant cash advance provider RCG Advances and other defendants made multiple unauthorized withdrawals from small businesses’ banks, sometimes taking thousands of dollars more than the agreed repayment amount.
The FTC also alleges RCG threatened to “break customers’ jaws” during collection calls.
The amended complaint further alleges RCG, formerly known as Richmond Capital Group, LLC and also doing business as Viceroy Capital Funding and Ram Capital Funding, violated the Gramm-Leach-Bliley Act’s prohibition on using false or deceptive information to obtain a consumer’s bank account information.
According to the complaint, in its agreements with consumers, RCG tells businesses they can receive an upfront amount of cash in exchange for allowing RCG to make daily withdrawals from the businesses’ bank accounts up to a “Total Purchased Amount.” The amended complaint alleges the defendants frequently continued to make the withdrawals well after the promised amount had been withdrawn, in one instance taking more than $75,000 without permission.
‘Wanton & Egregious Behavior’
The amended complaint also alleges “wanton and egregious behavior by defendants, including laughing at consumer requests for refunds from RCG’s unauthorized withdrawals from customer bank accounts; abusing the legal system to seize the business and personal assets of their customers; and threatening to break their customers’ jaws or falsely accusing them of child molestation during collection calls.”
The FTC said it is asking the court to assess civil penalties against the defendants, along with injunctive relief and requiring the defendants to turn over ill-gotten gains.
The case was originally filed in June 2020.