Tuesday, December 04, 2018

New York State Is Probing Abuses in Small-Business Lending

From Bloomberg LP
Written by Zeke Faux and Zachary Mider

New York’s attorney general has opened an investigation into potential abuses by finance firms that offer quick money to small businesses nationwide, according to a person familiar with the probe.

Attorney General Barbara Underwood’s office is looking into whether merchant cash-advance companies engaged in fraud or abused the state court system, said the person, who spoke on the condition of anonymity. Last week the office subpoenaed one of the largest cash-advance companies, Yellowstone Capital LLC, the person said.

"It’s reprehensible to defraud, deceive and harass small-business owners through predatory debt-collection practices and the abuse of our court system," Underwood said in a statement to Bloomberg News that didn’t provide details. “If a company is engaging in fraudulent and deceptive conduct, we want to know.”

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