I had a conversation with a client this week that honestly shook me, and it is something every Merchant Cash Advance broker needs to hear, especially brokers using outbound telemarketing or mass text messaging in Texas.
A few months ago, this client decided to test a new Merchant Cash Advance lead broker. Like many MCA brokers, he was focused on lowering customer acquisition costs. The data was inexpensive, the broker claimed the leads were high quality, and most importantly, he was told the list was compliant and scrubbed against the National Do Not Call registry. The broker also assured him that the data was safe for MCA text marketing and outbound SMS campaigns.
Everything sounded legitimate. Nothing raised red flags immediately.
After receiving the MCA lead data, my client launched a mass texting campaign, a common practice in the Merchant Cash Advance industry. Within days, the situation began to unravel. The lead broker had misrepresented the data. The list had not been properly scrubbed against the Do Not Call registry. Even worse, one of the individuals my client texted repeatedly—more than twenty-five times—was one of the most aggressive TCPA litigators in the country. This attorney has spent years filing TCPA lawsuits against businesses for illegal telemarketing calls and unsolicited text messages.
To make matters significantly worse, the individual was located in Texas.
Texas is one of the most dangerous states for Merchant Cash Advance brokers engaging in telemarketing or SMS marketing without strict compliance controls. Between federal TCPA regulations and Texas-specific telemarketing laws, penalties for unsolicited calls and text messages can escalate rapidly. Texting a number on the Do Not Call list or sending MCA marketing messages without proper opt-in can expose brokers to severe statutory damage on a per-message basis.
In this case, the attorney is now demanding more than one hundred thousand dollars to settle, with a direct threat of filing a TCPA class action lawsuit if my client does not comply.
When my client explained the situation to me, it was not just frustration—it was panic. He is on the verge of shutting down his Merchant Cash Advance business entirely. He does not have the financial resources to defend a prolonged TCPA lawsuit, and he does not have the ability to absorb a six-figure settlement.
This is the part of telemarketing compliance that many MCA brokers underestimate.
TCPA enforcement actions and telemarketing lawsuits do not always stop at the business entity. In many cases, litigators attempt to pursue personal liability, especially when compliance procedures, vendor vetting, and lead documentation are weak or nonexistent. What started as an attempt to save money on MCA leads has now become a serious threat to this individual’s business, livelihood, and personal financial security.
This entire situation could have been avoided with proper Merchant Cash Advance lead vetting.
If you are purchasing MCA data or running outbound text message campaigns, verbal assurances are not enough. Claims that data is “TCPA compliant” or “DNC scrubbed” must be backed by documented processes. Brokers need to understand how their lead data is sourced, how frequently it is scrubbed against the Do Not Call registry, whether there is documented express written consent for SMS marketing, and what compliance safeguards are actually in place.
Cheap Merchant Cash Advance leads are rarely cheap in the long term. When lead pricing seems too good to be true, it often is. In today’s regulatory environment, a single bad list can expose an MCA broker to catastrophic legal and financial consequences.
The Merchant Cash Advance industry is already under increased scrutiny from regulators, carriers, and plaintiff attorneys. Outbound telemarketing and SMS marketing are monitored more closely than ever, and text messaging remains one of the fastest ways for MCA brokers to trigger TCPA violations.
Cutting corners on MCA lead compliance does not just damage your business professionally. It can affect you personally. It can put your Merchant Cash Advance company, your peace of mind, and your personal assets at risk.
Choose your MCA lead providers carefully. In today’s Merchant Cash Advance environment, telemarketing compliance is not optional. It is survival.