The FTC's complaint alleges that Seek Capital falsely marketed its services as providing business loans and lines of credit with attractive terms, including 0% APR. Instead, consumers were duped into receiving stacked personal credit cards, leaving their credit scores in tatters and saddled with exorbitant fees. Over the past three years, these deceptive practices have extracted over $37 million from unsuspecting small business owners across the country.
SAN DIEGO and WASHINGTON, Nov. 25, 2024 /PRNewswire-PRWeb/ -- The Federal Trade Commission (FTC) has taken decisive action to shut down deceptive "0% interest business loan" schemes that have misled thousands of small business owners, consumers, and even reputable business funding brokers. A recent lawsuit against Seek Capital LLC and its executives highlights the Commission's efforts to protect honest businesses and consumers from fraudulent tactics that promise "free money" but instead deliver financial ruin.
The FTC's complaint alleges that Seek Capital falsely marketed its services as providing business loans and lines of credit with attractive terms, including 0% APR. Instead, consumers were duped into receiving stacked personal credit cards, leaving their credit scores in tatters and saddled with exorbitant fees. Over the past three years, these deceptive practices have extracted over $37 million from unsuspecting small business owners across the country.
A Pattern of Deception
The FTC outlined several key findings in its lawsuit:
- False Promises: Seek Capital advertised business loans and lines of credit but delivered personal credit cards, often unsuitable for business needs.
- Credit Card Stacking: Multiple credit card applications submitted without proper consent harmed consumers' credit scores, in some cases dropping them by over 200 points.
- Hidden Fees: Consumers were hit with fees of up to 10% of the total credit limit, plus additional charges, even when the promised funding was never delivered.
- Gag Orders and Fake Reviews: Seek Capital allegedly pressured consumers to leave positive reviews and included illegal non-disparagement clauses in contracts to suppress complaints.
The Gig Is Up: "0% Interest Business Loan" is a Scam
In a major win for small businesses and legitimate brokers, the Federal Trade Commission (FTC) has filed a lawsuit to put an end to deceptive "0% interest business loan" schemes, which have defrauded thousands of entrepreneurs while tarnishing the business funding industry.
The FTC's lawsuit against Seek Capital LLC exposes how the company preyed on small business owners with promises of "business loans" and "lines of credit." In reality, Seek Capital funneled applicants into high-risk, stacked credit card schemes. These actions caused devastating financial harm to over 5,000 consumers, including plunging credit scores, excessive fees, and even business closures.
FTC Exposes Deceptive Practices Hurting Small Businesses
The FTC's detailed complaint alleges that Seek Capital:
- Promised Loans, Delivered Credit Cards: Advertisements and telemarketers assured consumers they would receive business loans or lines of credit tailored to their needs. Instead, Seek submitted multiple personal credit card applications without consumer authorization, masking them as "lines of credit."
- Credit Damage and Hidden Costs: Seek's credit card stacking process destroyed personal credit scores—dropping them by as much as 200 points in some cases—while charging fees as high as 10% of total credit limits, plus early termination fees. One consumer reported losing over $11,000 in fees, crippling their business expansion plans.
- Illegal Gag Clauses and Fake Reviews: Seek required customers to sign contracts prohibiting negative online reviews, a practice banned under the Consumer Review Fairness Act. Employees also flooded online platforms with fake five-star reviews to bury legitimate consumer complaints.
- Pressure and Deception: Consumers were pressured to sign contracts immediately, with some told they would "lose financing" if they didn't comply. Once signed, the agreements concealed that Seek would only apply for personal credit cards, not loans or true lines of credit.
Widespread Impact
Over the past three years, Seek Capital's practices have extracted more than $37 million from unsuspecting entrepreneurs. Many consumers sought these funds to purchase equipment, make payroll, or grow their operations. Instead, they faced mounting debt, ruined credit, and delayed business plans.
"Seek Capital's actions not only harmed small businesses but also hurt the credibility of legitimate brokers working hard to support America's entrepreneurs," said an FTC spokesperson.
A Victory for Legitimate Business Funding
Reputable funding brokers, such as Liberty Capital, have expressed relief that the FTC is addressing these scams. "For years, unethical companies like Seek Capital have undermined trust in our industry," said a Liberty Capital representative. "This lawsuit is a necessary step to restore integrity and protect the hardworking entrepreneurs who rely on fair and transparent funding solutions."
Small Business Owners: How to Protect Yourself
The FTC encourages business owners to stay vigilant against funding scams. Here are some red flags to watch for:
- Promises of 0% Interest or "Free Money": Offers that sound too good to be true often conceal significant fees or hidden conditions.
- Credit Card Stacking: If the funding relies heavily on credit cards instead of direct loans or lines of credit, proceed with caution.
- High-Pressure Sales Tactics: Legitimate brokers will give you time to review contracts and answer your questions.
- Hidden Fees: Insist on clear, upfront disclosures about costs, interest rates, and repayment terms.
How to Avoid Scams
Business owners should beware of:
- Too-Good-To-Be-True Offers: "0% interest" loans are often a red flag for hidden fees or deceptive practices.
- Pressure to Sign Quickly: High-pressure tactics are a hallmark of scams.
- Ambiguous Terms: Ensure contracts clearly define services, fees, and funding sources.
File a Complaint or Seek Assistance
Business owners affected by Seek Capital or similar schemes are urged to file complaints at www.ftc.gov/complaint.
About the FTC
The Federal Trade Commission works to promote competition and protect consumers by investigating and prosecuting fraudulent, deceptive, and unfair business practices.
About Liberty Capital Group, Inc.
Liberty Capital is a reputable boutique financial services firm dedicated to providing transparent and ethical business funding solutions for small businesses. Unlike entities that employ deceptive tactics, Liberty Capital has NEVER offered "0% interest" business loans, recognizing the potential harm such misleading offers can cause to entrepreneurs. Instead, the company focuses on delivering honest, flexible financing options tailored to the unique needs of each client. By prioritizing transparency and ethical practices, Liberty Capital aims to empower small business owners with the resources and knowledge necessary for sustainable growth and success.
Media Contact:
Adrian Dalsey
CEO
Liberty Capital Group, Inc.
Contact: 888-511-6223
Media Contact
Adrian Dalsey, Liberty Capital Group, Inc., 1 6198383045, [email protected], https://libertycapitalgroup.com
SOURCE Liberty Capital Group, Inc.; Liberty Capital Group, Inc.

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