A federal judge yesterday signed off on a permanent injunction against a defendant — Jonathan Braun — accused of engaging in unfair collection practices from participating in the merchant cash advance or debt collection industries.
The Background: Back in 2020, the FTC sued a number of companies and individuals, including Braun, for allegedly deceiving small businesses by misrepresenting the terms of merchant cash advances that the company provided and then making threats of physical violence to induce customers to repay the debts. Most of the defendants settled with the FTC last year, agreeing to permanent bans from the collection industry and paying $2 million in fines and refunds to consumers. Customers were also required to sign confessions of judgment that the defendants used “unlawfully and unfairly” to seize assets in circumstances not expected by customers or permitted by the underlying contracts.
The Injunction: The provisions of the injunction include:
- Ban on merchant cash advance
- Ban on debt collection
- Remove negative credit information
- Prohibition on deceiving consumers and unauthorized charges
What Happens Next: The court has set a trial date of January 2024 to determine the amount of monetary relief that will be imposed against Braun.
What They Said: “Mr. Braun and his company targeted small business consumers with an egregious array of tactics, from predatory contract terms to violent threats, and the court’s opinion is a significant win on their behalf,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This case makes clear that the FTC will fight back against those who prey on small businesses.”
