The first call to your customer is the one that changes everything. Before that call, the dispute between you and the MCA company is private, contained, a matter of ledgers and contract clauses. After that call, the damage extends to relationships you spent years cultivating, and the MCA company knows this, which is precisely why the call was made.
Tortious Interference With Business Relationships
When an MCA collector contacts your customers and tells them to redirect payments, claims ownership of your accounts receivable, or implies that your business is failing, that collector has exposed the MCA company to a tortious interference claim. The elements vary by state, but the core structure is consistent: a valid business relationship existed, the defendant knew of it, the defendant intentionally interfered, and damages resulted.
The damages in these cases are real and often substantial. A supplier who learns from a collector that your business is in financial distress may shorten your credit terms. A client who receives a call suggesting that payments should go to someone else may take the next project to your competitor. The MCA company has not just collected a debt. It has diminished the value of your enterprise, and courts have recognized that diminution as compensable harm.
In early 2025, the New York Attorney General secured a judgment exceeding one billion dollars against Yellowstone Capital and its affiliates for predatory practices disguised as merchant cash advances. That case involved systemic abuse of small business relationships on a scale that clarified the regulatory appetite for enforcement in this space.
Cease and Desist Through Counsel
A cease and desist letter from an attorney accomplishes something a letter from the borrower does not. It signals that the next communication from the collector will be examined by someone who knows the difference between permissible collection and actionable harassment. The letter should identify the specific customers or vendors who were contacted, describe the content of those contacts with as much precision as available, and state that further third party contact will be treated as a basis for litigation.
The letter goes to the MCA company directly, not to any intermediary. And copies go to the customers who were contacted, assuring them that the matter is being handled through counsel and that no action on their part is required. This second step matters more than it appears. Your customer needs to hear from your attorney that the collector had no authority to demand payment redirection, because the customer does not know that on their own.
Filing a Complaint With the State Attorney General
Individual complaints build the record that enforcement actions require. The FTC’s permanent industry bans of certain MCA operators did not originate from a single event. They originated from accumulated complaints filed by individual business owners who took fifteen minutes to describe what happened to them.
In New York, the Department of Financial Services has expanded its scrutiny of MCA collection practices under the FAIR Business Practices Act, effective February 2026. In California, the Department of Financial Protection and Innovation accepts complaints involving commercial financing transactions. Neither agency will resolve your individual case. Both agencies will use your complaint to build the next enforcement action, and the next enforcement action is what eventually changes the industry’s behavior.
Filing is free. The forms are available online. The time investment is minimal. There is no reason not to file, and the reason to file is the same one that justifies voting: the individual act is small, but the aggregate consequence is not.
Seeking a Temporary Restraining Order
When the damage is ongoing and the collector will not stop, a temporary restraining order directs the court to intervene. The standard is irreparable harm, and a collector who is systematically contacting your customer base presents a strong case for it. Financial damages may be calculable after the fact, but the destruction of a business reputation with a client who will never return is, in a meaningful sense, irreparable.
The TRO requires a motion, a declaration detailing the contacts, and in most jurisdictions an appearance before a judge who will decide whether to grant emergency relief. It is not inexpensive. It is not simple. But when a collector has contacted your five largest customers in a single week, the cost of the TRO is small relative to the cost of inaction.
Counterclaims in Any Pending Litigation
If the MCA company has already filed suit against you, the customer contact becomes the basis for a counterclaim within that same action. The counterclaim transforms the dynamic. The MCA company filed expecting to pursue a straightforward breach of contract. Instead, the company now faces allegations of tortious interference, violations of state collection statutes, and potentially unfair business practices claims that carry their own statutory penalties.
Counterclaims also change the settlement calculus. An MCA company that is only suing you has nothing to lose by going to trial. An MCA company that is defending against counterclaims with real damage exposure has a financial incentive to resolve the dispute. The counterclaim is not a defensive maneuver. It is an offensive one, and it works because the collector’s own conduct provided the ammunition.
None of these options require you to have been a perfect borrower. The question of whether you owe money on the MCA is separate from the question of whether the collector broke the law in trying to collect it. Both questions may be true simultaneously. You may owe a debt. The collector may still have committed actionable violations. Those two facts coexist without contradiction, and understanding that coexistence is where effective defense begins.
The conversation starts with a consultation, and the consultation is free. If a collector has contacted your customers, the clock on your remedies is already running.
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