Can an MCA Funder Call My Family or Employees?
A funder can contact people connected to the business for limited reasons, like confirming the business's status, but repeated harassing calls to family or employees are a problem worth documenting. The federal debt collection law that restricts calls to third parties generally covers consumer debts, not business debts.
Why is business debt collection different?
The Fair Debt Collection Practices Act sets rules for collecting consumer debts, which it defines as debts for personal, family or household purposes. Business debts, like an MCA, generally fall outside that definition. That doesn't mean anything goes, though. State laws, harassment rules and the funder's own contract can still limit conduct.
What contact is reasonable?
A funder trying to reach you calls the business line, your cell and sometimes your employees to ask for you. Calling to confirm whether the business is operating is common.
What contact crosses the line?
Threats, abusive language, false statements, repeated calls meant to harass or telling others private details of your debt can violate state laws or other rules. Write down the date, time, caller and what was said.
What should you do about calls to family or staff?
- Tell the funder in writing how and when to contact you.
- Ask employees and family to note any calls and not discuss your finances.
- Respond to the funder so they have less reason to call others.
- Talk to an attorney if the calls continue or turn threatening.
Where can you report abusive contact?
Your state attorney general's office takes complaints about abusive collection. Some states have laws covering commercial collection.
Is this legal advice?
This is general information, not legal advice.
How do you get ahead of it?
Most aggressive collection starts after silence. Contacting the funder early about a problem usually keeps it professional.
How do you protect your staff?
Employees shouldn't be put in the middle. Tell them it's fine to take a message and pass it along, and that they don't need to answer questions about the business's finances. A simple script, like saying the owner will return the call, keeps them out of it and keeps the information in your hands.
Why ask for contact in writing?
Asking the funder in writing to contact you by email or at a specific number gives you a record. If calls to others continue after that, the record helps any complaint or legal claim.
What changes when a collection agency calls?
If the funder hands the account to a collection agency, the same general rules apply. Ask the agency for written details of the debt, including who they represent and the balance they claim.
How do you stay calm through it?
Heated calls rarely help. Stick to facts, keep notes and move important conversations to email where you can.
How can Afterfirst help with this?
Call 877-FUND-654 if you're behind and the calls have started. We'll help you understand your options, including whether a consolidation or modification is realistic.
What else do owners ask about this?
- What should I do if I get a demand letter from an MCA funder?
- How do I report an MCA funder or broker to a regulator?
- What should I do if I think I was scammed by an MCA broker?
More short answers on this topic are on the legal questions FAQ, and the MCA payment calculator runs the numbers for your own file.
Where do these facts come from?
Have a question we didn't answer?
Ask us on the call. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.