When Debt Settlement Companies Take the Money but Do Not Do the Work

I am currently working with merchants and small business owners who believe they were wronged by debt settlement companies that promised help with merchant cash advance obligations but failed to deliver meaningful results.

The pattern is deeply troubling.

A business owner under financial pressure hires a company for help. The company promises to communicate with creditors or funders, negotiate settlements, and guide the business through a difficult situation. The business owner then pays tens of thousands of dollars into a supposed account described as an escrow, trust account, savings account, or retainer.

But instead of relief, the business owner gets silence, delay, confusion, and excuses. Make no mistake it, some of these MCA companies are crooks. I stand by that. I’ve been threatened by them and their attorneys and they don’t dare touch me because they know my reputation and they know I’ll meet them toe-to-toe any time, any day.

In some cases, little or no settlement work appears to have been performed. In others, the company cannot clearly explain what was done, who was contacted, what negotiations occurred, or why the business owner’s money has not been returned.

That is not acceptable.

Money paid by a struggling business owner should not disappear into a so-called “program.” If the funds were not used to settle obligations, and if the company did not earn those funds by actually performing meaningful work, then the business owner should not have to fight to get that money back. In short, that’s called stealing. Furthermore, these companies assume fiduciary obligations and violate those obligations in the way they handle funds and commingle them.

A company that claims to help merchants should be transparent about what it is doing. It should be able to document its work. It should be able to show communications, negotiations, settlement efforts, and results. And it should be able to explain exactly what happened to every dollar the merchant paid.

When that transparency is missing, business owners should ask serious questions.

I believe small business owners should be extremely cautious before depositing substantial money into any debt settlement escrow or savings program. The better model is one based on direct communication, clear strategy, honest guidance, documented work, and accountability — not vague promises and large upfront deposits.

My practice is focused on helping small businesses protect themselves from unfair, deceptive, and abusive practices. If your business paid money to a debt settlement company that failed to perform, failed to communicate, failed to resolve your obligations, or refused to return unearned funds, you may have claims worth pursuing.

Small business owners work too hard for their money to have it taken under the promise of help that never comes.