Overcharging in merchant cash advance accounts rarely announces itself. It accumulates in small amounts across hundreds of transactions, and most business owners discover it months after it began, if they discover it at all.
The six signs below are visible in your bank statements and your contract, without requiring any specialized financial analysis. You need only know where to look.
Sign 1: Your Running Total Exceeds the Purchased Amount
Every MCA specifies the total amount purchased, the sum that represents the funder’s maximum entitlement. When the cumulative debits against your account exceed that figure, the agreement has been satisfied, or overpaid. Add every debit since the first day of the funding term. Compare the sum to the purchased amount in your contract. If the debits exceed the purchase price, you have already paid more than was owed.
This calculation is straightforward. The reason it goes undone is that no one outside the funder is performing it on your behalf.
Sign 2: Deductions Continue After You Believe the Agreement Has Ended
Some funders continue ACH debits past the point of full payment. The continuation may reflect an internal accounting error, a miscalibrated automated system, or something more deliberate. The effect is the same regardless of cause: money leaves your account that the funder has no authorization to collect.
Business owners who notice this pattern weeks or months later often assume the charges were for something they did not track carefully. They were not. Compare the agreement term and the total purchased amount against your complete debit history.
Sign 3: The Daily Amount Is Higher Than Your Contract Specifies
Pull the agreement. Locate the daily or weekly deduction amount. Compare it to every entry in your bank statement. If the funder has been collecting one amount and your contract specifies a different, lower amount, that difference is a debit that exceeded the authorization. It is recoverable.
Funders occasionally increase deduction amounts unilaterally, characterizing the change as an adjustment under contract language the business owner never saw as operative. Whether that characterization is accurate depends on the specific contract provision, not on the funder’s assertion.
Sign 4: Fees Appear That Were Not Disclosed at Signing
MCA agreements frequently contain fee schedules, but the fees disclosed at signing are not always the fees collected during the term. NSF fees above the disclosed amount, wire transfer charges not mentioned in the agreement, administrative fees added after origination, and maintenance fees that exceed the stated rate are all candidates for dispute.
In late 2024, a series of enforcement actions and private litigations across several states established that undisclosed fees in MCA agreements could constitute unfair or deceptive trade practices under applicable consumer protection statutes, even in the commercial context.
Sign 5: The Amount Collected Does Not Correspond to the Specified Percentage
In a percentage-based agreement, the daily deduction should equal the specified percentage of that day’s deposits. If the funder is collecting a percentage-based amount that consistently exceeds your actual deposit percentage, either the holdback rate has been misapplied or the agreement was structured as a fixed debit despite its percentage-based language.
A spreadsheet with three columns, daily deposits, specified percentage of deposits, and actual debit, will make this visible inside of an afternoon. The pattern, if it exists, tends to be consistent rather than sporadic.
Sign 6: Your Account Receives Multiple Debits From the Same Funder on the Same Day
Double-debiting, two entries from the same funder on a single business day, is a recognized overcharging pattern in MCA enforcement actions. It may reflect a technical error in the origination system, or it may reflect deliberate collection. Either way, no single-day double deduction is authorized by a contract specifying a single daily amount.
If you see two entries from the same source on any given day, document them immediately. They are the clearest form of unauthorized debit available in any MCA dispute.
What to Do
Compile the documentation: contract, ACH authorization, and complete bank statements. Calculate the overage. Send a written demand for an account statement with a specific cure period. File an ACH dispute for individual unauthorized entries. Engage legal counsel if the overage is material or if the funder does not respond.
The New York Attorney General’s action against Yellowstone Capital in March 2024 confirmed that overcharging at scale is regulatorily actionable. Individual business owners with smaller overcharges have the same underlying legal theory, applied to a smaller set of facts.
If any of the six signs above appear in your statements, a consultation is the appropriate next step. The calculation is simple. The legal path depends on what the calculation reveals.
