Additionally, the Commission alleged that Yellowstone Capital, Fundry, Yitzhak, and Reece misrepresented the financing amount they agreed to provide to consumers in their contract.
The defendants usually provide consumers with substantially less than the total amount of financing entered in their agreement “by withholding fees that range from hundreds to thousands of dollars prior to disbursement. These fees are mentioned several pages into the contract without any indication that they are deducted from the ‘Purchase Price’ – the funds promised to consumers,” according to the FTC.
Furthermore, the Commission alleged that the defendants withdrew hundreds or thousands of dollars from consumers’ accounts even if they already paid in full the financing amount in their contract.
According to the FTC, the defendants violated Section 5 of the FTC Act, which prohibits deceptive or unfair business practices.
In a statement, FTC Bureau of Consumer Protection Director Andrew Smith said, “Small businesses are struggling right now and need responsible sources of financing. Making sure that lenders and funders don’t deceive business borrowers or engage in servicing abuses is a big priority for the FTC.”
