The Remedy For a Bad Industry Decision?
A recent disappointing New York trial court decision concerning merchant cash advances has been making the rounds over the past few weeks and a few industry players have been asking if there is cause to be concerned. While the case will likely have little precedential value, it should serve as a reminder to all funders and ISOs in the industry to invest resources where they matter; on employee education, contract review, legal representation, and customer service.
Failures or breakdowns in these areas can lead to consequential events. With so many products being offered in the marketplace to small business owners today, it is of great importance to be educated on what they all are and how they work. Sales reps, underwriters, and other staff should know what’s in the language of the contracts and be able to articulate it accordingly.
A starting point, of course, is getting your certificate in Merchant Cash Advance Basics, the online tutorial that covers the differences between the purchases of future sales and loans. It is worthwhile even for industry veterans to take considering how much MCAs have evolved over the years.
We’ve also got a list of several industry attorneys on our website, none of whom pay to be there.
Of note for contracts and legal compliance is Hudson Cook, LLP, who actually created the MCA Basics course.
Of note for litigation concerning the validity or enforcement of contracts in New York courts, is Christopher Murray of Giuliano McDonnell and Perrone, LLP, whose experience includes the VIP Limo case and several others.
It helps to have a system in place to try and resolve conflicts with merchants before they escalate. But that job is made far easier when the contractual expectations of all parties is understood from the beginning.
What’s the takeaway from a case that has gone wrong? That you should work hard to do everything right.Last modified: December 18, 2016
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.