Seek Capital Banned from Business Financing by FTC

The FTC has secured a permanent ban against California-based Seek Capital LLC and its CEO Roy Ferman, marking another aggressive enforcement action in the small-business finance space. The October 2025 final order bars both the company and Ferman personally from ever offering business financing, debt relief, or credit repair services again.

The FTC's permanent ban against Seek Capital and CEO Roy Ferman isn't the story—it's the enforcement machinery behind it that matters. The October 2025 final order deployed three regulatory tools that increasingly apply to legitimate alternative business lenders, not just credit card stacking schemes.

What changed and why it's actionable now:

• TSR now covers B2B telemarketing misrepresentations. The May 2024 amendments eliminated the 30-year exemption for business-to-business calls. ¹ Civil penalties run $51,744 per violation—and the Seek case confirms the FTC will use this authority against small-business finance companies. ²

• CRFA violations require immediate contract review. Seek's agreements prohibited negative reviews for three years—the court found this void from inception. ³ If your contracts contain non-disparagement clauses, they're unenforceable and create enforcement exposure whether you've tried to enforce them or not. ⁴

• Personal liability is now standard practice. Ferman is individually banned from business financing for life—he can't incorporate a new entity and restart. ⁵ This follows RCG Advances (Braun, 2023), Yellowstone Capital (2022), and a pattern of FTC actions holding executives personally accountable alongside their companies. ⁶

• $48.28 million judgment imposed, with $250,000 due immediately and the balance suspended pending financial verification—standard structure when the FTC can't collect but wants the judgment on record. ⁵

The Seek case itself involved credit card stacking fraud—fundamentally different from MCA, factoring, or revenue-based financing. But the regulatory tools the FTC used apply broadly, and the enforcement precedents are now set.

Enforcement Tools That Now Apply to Alternative Business Lenders

What did the TSR amendments actually change?

From 1995 until May 2024, the Telemarketing Sales Rule essentially gave B2B telemarketing a pass. The only exception was sales of office supplies and cleaning products—a carve-out created because that specific market had a fraud problem in the mid-90s. ¹

That exemption is now dead for misrepresentation claims.

As of May 16, 2024, all telephone calls to businesses to induce the purchase of goods or services must comply with TSR provisions prohibiting misrepresentations. ² The rule now covers ten categories of prohibited misrepresentations in B2B calls:

Generally applicable prohibitions:

• Cost and quantity of goods or services offered

• Material restrictions and conditions

• Material aspects of performance and central characteristics

• Material aspects of refund and cancellation policies

Specific prohibitions:

• Prize promotions

• Investment opportunities

• Claims of affiliation or endorsement

• Credit card loss protection

• Negative option features

• Debt relief services

The second TSR provision broadly prohibits making any false or misleading statement to induce payment for goods or services. ¹

Here's why this matters financially: TSR violations carry civil money penalties currently capped at $51,744 per violation. ¹ The 2021 Supreme Court decision in AMG Capital took away the FTC's ability to obtain monetary relief in typical FTC Act cases. But TSR cases retained their penalty provisions. If your outbound team makes misrepresentations to business borrowers, you're now accumulating per-call penalty exposure that didn't exist 18 months ago.

The Seek complaint cited telemarketers claiming "special relationships" with lenders, promising "lines of credit" with "cold hard cash," and using high-pressure tactics described by customers as "incessant" and "harassing." ³ Under the new TSR framework, every misrepresenting call is a separate potential violation.

What to review in your shop: Record and audit outbound calls. Are your salespeople claiming partnerships, preferred rates, or approval odds you can't substantiate? Are they describing your product accurately—"purchase of future receivables" vs. "line of credit" vs. "business loan"? The distinction matters, and the FTC is now watching B2B calls the same way it watches consumer telemarketing.

What contract language violates the CRFA?

The Consumer Review Fairness Act has been in effect since March 2017, but many funders still haven't audited their agreements. ⁷ The Seek case should prompt immediate review.

Seek's contracts prohibited customers from posting negative reviews for three years. The court found this void from inception under the CRFA. ³ But here's what funders miss: the FTC can pursue enforcement even if you've never tried to enforce these provisions. Simply having the language in your contract creates exposure. ⁴

The CRFA makes void from inception any form contract provision that:

• Prohibits or restricts the ability to review a company's products, services, or conduct

• Imposes penalties or fees for posting reviews

• Transfers intellectual property rights in customer reviews to the company ⁷

Language patterns that create problems:

"Customer agrees not to post any negative reviews or complaints about [Company] on any public forum" — void.

Confidentiality clauses covering "customer experience" or "terms of service" broadly enough to encompass reviews — void.

Liquidated damages tied to "negative publicity" or "reputational harm" — void.

Requirements to submit reviews to the company for approval before posting — void.

Mandatory arbitration clauses paired with review restrictions — the arbitration clause may survive, but the review restriction is void.

What you can still restrict: Reviews containing your confidential business information, defamatory content, trade secrets, or content that's harassing, obscene, or unrelated to your products and services. ⁷ But blanket prohibitions on negative reviews? Those are unenforceable.

The FTC's 2019 enforcement actions against A Waldron HVAC, National Floors Direct, and Las Vegas Trail Riding established that CRFA violations result in orders requiring companies to notify all affected customers that the contract provisions are void—plus ongoing compliance monitoring. ⁴ That's reputational damage on top of the enforcement action itself.

Action item: Pull your standard merchant agreement, ISO agreement, and any customer-facing contracts. Search for "review," "disparage," "negative," "publicity," "reputation," and "confidential." Flag anything that could be read to restrict honest customer feedback. Fix it before the FTC fixes it for you.

Why can't executives hide behind corporate structure anymore?

Roy Ferman isn't just watching his company get shut down. He is personally and permanently banned from offering business financing, debt relief, or credit repair services. ⁵ He cannot incorporate a new entity and resume operations. He cannot take an executive role at another funder. His career in this industry is over.

This is not an outlier result. It's the current enforcement pattern.

October 2023: Jonathan Braun, owner of RCG Advances, permanently banned from the MCA industry after the FTC proved he deceived small businesses and seized personal and business assets through unfair practices. ⁶

2022: Yellowstone Capital settlement required corporate principals to pay nearly $10 million to resolve charges of unfair and deceptive practices. ⁹

2024: The FTC asked DOJ to sue Adobe and two executives—not the CEO, but the SVP of digital go-to-market and the president of digital media business—for allegedly hiding early termination fees. ¹⁰

2023: Drizly's CEO was held personally liable for the company's data security failures—the first time the FTC imposed personal liability specifically for privacy and security compliance. ¹⁰

2024: BlueSnap's former CEO and SVP agreed to a settlement that included a $10 million payment and a ban on providing payment processing to high-risk clients after allegedly advising a fraudulent company on how to evade fraud detection. ¹⁰

The pattern accelerated under former Chair Lina Khan, but it began during the first Trump administration. ¹¹ Individual executive liability is now standard FTC practice across sectors, not a special circumstance reserved for sole proprietors.

The legal standard: executives can be held personally liable when they participated directly in the unlawful conduct or had authority to control it. ¹¹ "I didn't know what the sales team was saying" is not a defense when you had authority over marketing and sales operations.

What this means operationally: Owners and C-suite officers need to understand their personal exposure. If your company's marketing, scripts, or contract terms cross the line, you personally are exposed to industry bans, monetary judgments, and ongoing compliance obligations. D&O insurance doesn't cover conduct bans. The corporate veil doesn't protect you from individual liability findings.

How is the FTC treating small business borrowers?

The FTC determined in FTC v. IFC Credit Corp. (2008) that "consumer" includes businesses as well as individuals for UDAP purposes. ⁹ This isn't new law, but enforcement activity has increased significantly.

The practical implication: the same standards that apply to consumer lending marketing increasingly apply to business lending operations. The FTC expects small business borrowers to be treated like consumers who deserve clear disclosures, accurate marketing, and fair dealing.

Disclosure clarity: Total cost must be accurate and prominent. Seek charged 10% of total credit limits in fees that customers often didn't learn about until they received invoices. ³ If your fee structure requires explanation, you're exposed.

Affiliation claims: Any implication of partnerships, preferred status, or exclusive arrangements with capital providers needs to be verifiable. Seek claimed "special relationships" with lenders that didn't exist.

Credit impact disclosures: If your underwriting involves credit pulls, bureau inquiries, or reporting, say so upfront. The FTC specifically cited Seek's false representations that using their services would not harm credit scores.

Cancellation terms: Seek imposed $995 early termination fees even before submitting a single application. ³ Punitive cancellation terms that aren't prominently disclosed are UDAP exposure.

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