Serial Litigants May Target Websites and “Trackers” As Alternative to TCPA
June 12, 2026
The small business loan brokerage had played it safe. Rather than robodial and take their chances in the minefield of TCPA compliance, they ran ads on Facebook and Instagram and had the merchants call them. Inbound leads were gold, they cheered, until one of those inquiries came through a little differently. It was a demand for damages for having been tracked on the internet.
The merchant alleged that they had only been served ads on social media by that company because they had been tracked from a prior website visit. They hadn’t wanted to be tracked and there was no option to opt out of tracking. As a result, they demanded to be compensated, heftily.
By now, most internet users have at least heard the term GDPR, the General Data Protection Regulation that became a never-ending source of controversy throughout Europe, but not all are aware that states and litigants in the US have tried to create a similar framework for privacy. For some in the small business finance industry, the vast complexity of compliance was not fully understood until the lawyers came calling.
“Pretty much every MCA company is potentially a victim because they’re all doing advertising,” said Richart Ruddie, CEO of Captain Compliance, a firm that specializes in safeguarding companies against these sorts of threats. “What we do is we protect against the rise and surge in privacy lawsuits and privacy litigation. So, anybody running TikTok ads, Facebook ads, Instagram ads, any sort of technology that does session-replay where it watches you move the cursor on the screen, if they’re running Google Analytics, all of these are cases that have been tried and are being litigated over.”
Ruddie said that companies within the small business finance industry, including a few within the segment of MCA, have been hit with claims, and they’re now actively working with them to make sure it doesn’t happen again.
“What our software does is provides the ability for users to have consent to opt-in or opt-out of any sort of ad targeting, tracking, session-replay technology,” Ruddie said. “And then we also provide software that constantly keeps businesses’s privacy notices and privacy policies up to date with their tracking and what they’re doing as well as their data handling practices.”
The larger issue is that for companies that might already be aware of the risks, the solutions they’re using may not actually be compliant with the laws.
“What’s happening now is there’s a handful of these cookie banner softwares but they don’t work and they’re creating bigger issues because they’re like ‘Hey, you told me I could opt out, and then I turned off the selling and sharing of my personal information and you still track me,'” Ruddie explained.
This is made all the more complex by the fact that there are nearly two dozen states with their own twists on compliance. And a growing cottage industry of serial litigants that know this complexity could make website operators easy targets to profit off of. For instance, some of them are going around and running automated website scans just to see who to target. Ruddie said that he’s seen claims reach into the tens of thousands or hundreds of thousands of dollars for alleged privacy violations.
Preventative measures are within reach, however. Ruddie says that for a brand new customer they can get a company compliant in one to three business days. It’s hard for companies to hide in the shadows if they’re online because it doesn’t take much to see what’s there and what isn’t.
“You can right-click and look at the code and then you can see all the different tech and what’s running on the website,” Ruddie said.
Fed Surveys Show Minimal Change in Regular Financing Product Usage
June 9, 2026The Federal Reserve’s 2025 survey of small businesses with less than 500 employees revealed that 7% of them regularly used merchant cash advances. That’s the exact same level reported by business owners in 2017 during the same survey, 7%. While news reports have suggested that the product has grown substantially over an eight-year period, respondents indicate that not much has changed.
The approval rate for MCAs is also low compared to alternatives in the market. Respondents, for example, reported that in 2025 they were more likely to get approved for an auto or equipment loan (71% got fully approved) and a mortgage (55% got fully approved) than an MCA (only 48% got fully approved). Business lines of credit were right below that with 45% saying they got fully approved for one.
Respondents were also more likely to have applied for a business line of credit (43% applied), business loan (32% applied), or an SBA loan (20% applied) than they were an MCA (12% applied) in 2025.
“Large and small bank applicants chose their lender based on their existing relationships, while online lender applicants prioritized speed and their expected chance of being funded,” the Federal Reserve report stated.
The 2025 survey was published in the 2026 report and the 2017 survey was published in the 2017 report.
Lightspeed Capital’s MCA Revenue Grew by 73%
June 5, 2026Capital revenue grew 73% year-over-year, while merchant cash advances outstanding grew a more modest 12% year-over-year, thanks to a payback period that declined to 7 months, a 13% improvement over last year,” said Lightspeed CFO Asha Bakshani during the company’s recently quarterly earnings call.
When Daniel Perlin of RBC Capital Markets asked if that growth might continue to accelerate, Bakshani said they were still being careful and to expect 35%+ growth going forward.
“What we have to keep in mind at the end of the day, Dan, is we want to make sure that our default rates remain in the low single digits,” Bakshani said. “We’ve done a really good job at accelerating ROI on Lightspeed Capital, reducing the months payback with which we get repaid (down to 7), and that’s resulted in very low default rates, the lowest we’ve seen in the industry, to be honest. So what’s important to us is to grow this business prudently and we expect to continue to do that with some nice 35-plus percent growth in fiscal ’27.”
Lightspeed funded about $350M in MCAs from March 31, 2025 – March 31, 2026.
Deep Search, Merchant Lawsuits, and More
May 19, 2026
The deal came into underwriting and within minutes alerts popped up. The merchant had been sued by an MCA company in 2018. An auto-decline? Perhaps. Or maybe a closer look into the court records would shed light on whatever happened there to see if the situation is manageable, that is if the records are even easily accessible to begin with and the underwriter doesn’t mind parsing through a docket full of filings.
QuickVett will spare you the trouble and cut right to the chase. That lawsuit? A dispute over $3k that happened at the tail-end of a large $100k deal. The outcome? A satisfied settlement. It’ll all be right there in its report. No manual lookup on the case required. QuickVett, which describes itself as a merchant intelligence platform, scans state and federal court records across the US. If there’s a hit involving an MCA it will use an MCA-specific AI analysis to present relevant details to an MCA underwriter. An immediate default is distinguishable from one that happened after a long lengthy relationship, for example. Maybe a conflict arising after the 7th renewal provides clarity that otherwise wouldn’t be readily obvious. Most underwriters are already familiar with NYSCEF but if the deal is not in the New York State court system, it’s not going to be found. QuickVett says they’ll find it wherever it is.
QuickVett also does creative searches on its own, such that it will discover if the merchant’s DoorDash account or e-commerce site has gone offline, for example, or if employees of the business recently updated their LinkedIn accounts to say that they no longer work there. QuickVett also pays special attention to the corporate structure and job title of the officers. For example, in an impromptu trial afforded to deBanked for test purposes, QuickVett’s deep search system discovered a sworn affidavit filed by a business owner in an old court case and compared what he said to public records and his LinkedIn profile about his role in the business. The result was that everything matched. But if it hadn’t, an underwriter might have to contend with why a business owner swore he had partners in an obscure court case but listed himself as the 100% owner on a funding application and proceed accordingly.
Overall, “QuickVett scans court records, background databases, corporate filings, social media, and the web — delivering a complete merchant intelligence dossier in under 5 minutes,” the company states. Its AI systems custom tailor the findings to an MCA-style underwriting process.
Seven Percent of Small Businesses Use MCAs on a Regular Basis
May 15, 2026According to the latest Small Business Credit Survey taken by the Federal Reserve, 7% of businesses with less than 500 employees use merchant cash advances on a regular basis. This was up from 6% the previous year.
For businesses that applied for financing, 12% applied for an MCA, up from 9% the previous year. Forty-eight percent of those applicants said that they got fully approved for one and 12% said they were declined. This contrasts with last year’s figures of 33% and 9% respectively. These charts are compared below while the full 2026 survey report can be viewed here.
It should be noted that the 2026 data reflects a survey conducted from September 2025 – November 2025 for that trailing 12 month period and the 2025 data reflects a survey conducted September 2024 – November 2024.
New York State Bill Seeks to Criminalize Invoice Factoring, Merchant Cash Advances, and More
May 6, 2026A Senate Bill in New York hopes to rewrite the state’s criminal usury laws to include invoice financing, revenue-based financing, merchant cash advances, retail installment contracts, “or any transaction that in substance functions as the advance of funds in exchange for a future payment or obligation, regardless of the label assigned to such transaction.” S10127, introduced by Senator Rachel May (D), says that the purpose is to ensure “that businesses cannot evade New York’s longstanding usury laws by re-labeling high-cost financing products as services or other non-loan transactions, and to apply existing civil and criminal interest rate protections to covered financing arrangements.”
Any product that falls under these definitions would be deemed criminal if its all-in cost exceeds 25% per annum or the equivalent rate for a longer or shorter period. Depending on the circumstances it would either be considered a Class E felony punishable up to 4 years in prison or a Class C felony punishable up to 15 years in prison.
The bill has merely been introduced and has not yet made its rounds through the legislature. It can be viewed here.
Shopify Capital: $1.4B in Business Loans and MCAs in Q1
May 5, 2026
Shopify’s business loan and merchant cash advance offerings continue to increase. This follows a consistent decade-long rise with no down years. In Q1, the company originated $1.4 billion in business loans and merchant cash advances, up from $821 million YoY. Based on the weight of the respective receivables, the product mix is roughly 82% loan-based and 18% MCA.
Of the loans it originated in 2025 that still have an outstanding balance, 10.8% were more than 6 months behind on their original payment schedule as of March 31, 2026.
Delinquency chart in in the Q1 docs:
Merchant Cash Advances Excluded From CFPB Small Business Loan Data Collection
May 1, 2026Merchant Cash Advances are now excluded from the CFPB’s small business loan data collection requirements. In the final rules filed by the agency on April 30th, the previous proposal to exclude MCAs from Section 1071 is now deemed approved and final.
“Since MCAs are not covered credit transactions under this final rule, no MCA providers will be required to report,” the docs say. The rationale is discussed across the 314 pages that comprise the final decision. However, the agency did leave open the possibility to reconsider the inclusion of MCAs years down the road.
But for now after more than a decade of debate and confusion over the matter, MCAs will not be considered a covered credit transaction for the purpose of Section 1071 of the Wall Street Reform and Consumer Protection Act. You can read the final rules here.
