WASHINGTON—Following a lawsuit by the Federal Trade Commission, Jonathan Braun, who controlled small-business funding company RCG Advances, will face a permanent ban from the merchant cash advance and debt collection industries.
A federal court issued summary judgment in favor of the FTC in the case along with a permanent injunction against Braun.
The FTC sued Braun in June 2020, along with four other defendants, for his role with RCG Advances, which formerly did business as Richmond Capital Group, charging that he deceived small businesses and other organizations by misrepresenting the terms of merchant cash advances the business provided, and then used unfair collection practices, including sometimes threatening physical violence, to compel consumers to pay, the FTC said.
The Allegations
The suit also alleged that Braun and the other defendants:
- Made unauthorized withdrawals from consumers’ accounts
- Required businesses and their owners to sign confessions of judgment as part of their contracts, which allowed the defendants to go immediately to court and obtain an uncontested judgment in case of an alleged default.
- Unlawfully and unfairly used these confessions of judgment to seize consumers’ personal and business assets in circumstances not expected by consumers or permitted by the defendants’ financing contracts.
‘Extensive Misconduct’
The court’s opinion granting summary judgment in favor of the FTC found that Braun engaged in “extensive misconduct” that violated both the FTC Act and the Gramm-Leach-Bliley (GLB) Act, and that Braun was liable for the damages caused by his and the company’s unlawful conduct.
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