CFG Merchant Solutions Lawsuit: Rulings, Complaints, and 2019 Changes

The CFG Merchant Solutions lawsuits are almost all collection actions the company itself has filed in New York courts against small businesses that stopped paying on merchant cash advance agreements. CFG has won some of these cases, but several recent rulings have gone against it because judges found the company’s affidavits and payment records inadmissible or its documentation incomplete.¹

Why CFG Ends Up in Court So Often

CFG Merchant Solutions, founded in 2015 and based in New York, funds merchant cash advances: it pays a business upfront in exchange for a share of that business’s future receivables, then collects through daily, weekly, or monthly debits from the merchant’s bank account. Agreements typically include a personal guarantee from the owner and authorize CFG to file a UCC-1 financing statement claiming an interest in the receivables.²

When a merchant misses payments, blocks withdrawals, or otherwise breaches, CFG sues for breach of contract, usually naming both the business and the individual guarantor. It generally moves quickly for summary judgment to avoid a trial, relying on an affidavit from a CFG employee plus payment history records.¹ That template has run into trouble in several recent rulings.

Rulings That Have Gone Against CFG

CFG v. Complete Automotive Repair Service (2024)

In November 2024, Kings County Supreme Court Justice Aaron Maslow denied CFG’s motion for summary judgment against Complete Automotive Repair Service and its owner, Jamie Carpenter. CFG had advanced $15,000 for $22,350 in future receivables and was seeking $17,996 in unpaid receivables and default fees after the defendants allegedly instructed their bank to stop payments.¹

The court threw out CFG’s central evidence. An affidavit from James Elder, CFG’s Director of Risk Management, used boilerplate language about records being kept “in the ordinary course of business” but did not explain who made the entries, how the records were maintained, or how data from third-party banks ended up in CFG’s files. Justice Maslow held that Elder had not laid a proper foundation under New York’s business-records hearsay exception, and he pointed to unexplained codes and internal inconsistencies in the payment history. Without admissible evidence, CFG could not establish the basic elements of its claim, and the burden never shifted to the defendants.¹

CFG v. Home Media Tech FL (2024)

In another Kings County case, CFG sued Home Media Tech FL Inc. and its guarantor, Alba Galindo, over a February 2023 agreement involving $244,200 in future receivables. The defendants did not even oppose the motion. The court still denied summary judgment. CFG had claimed that roughly $84,000 of the purchase price had been applied to satisfy an earlier outstanding balance, but the agreement itself said nothing about any prior debt, and CFG produced no documentation of the earlier agreement. Without proof of a breach, the guarantor’s obligations were never triggered. The court also dismissed CFG’s unjust enrichment claim, noting that such a claim cannot stand when a valid contract already governs the dispute.³

CFG v. Valentis Security Services (2022)

A 2022 case in New York County Supreme Court split the difference. The court granted summary judgment against Valentis Security Services for $149,285.46 plus interest, finding that the company had breached a settlement agreement with CFG. But it denied summary judgment against the individual guarantor, Marnie Sutch, ruling that CFG had not established which specific obligations Sutch personally breached. CFG had tried to establish her liability through a procedural device called a “notice to admit,” which the court rejected as an improper attempt to resolve the central issues of the case without actual evidence. The claims against Sutch were separated out and allowed to continue.⁴

A Case CFG Won

In September 2025, Kings County Supreme Court Justice Wavny Toussaint granted CFG summary judgment against Essential Foundations Preschool & Learning Center and directed entry of a $35,366 judgment plus interest. The defendants attacked an affidavit from CFG’s Collections Manager Laura Cinnella and argued the agreement was a disguised usurious loan. The court rejected both arguments, and it noted a procedural weakness on the defense side: the defendants had submitted only an attorney affirmation rather than an affidavit from someone with personal knowledge, which carried no evidentiary weight for raising a factual dispute.⁵

The Loan-or-Purchase Question Running Through the Cases

A recurring issue in CFG’s litigation is whether its agreements are genuine purchases of future receivables or, in substance, high-interest loans. The stakes are large. If a court recharacterizes an MCA as a loan, it becomes subject to New York’s usury laws, which cap interest at 16% for civil usury and 25% for criminal usury. Many MCA arrangements, converted to an effective interest rate, sit well above those limits.⁶

Courts look at whether the funder is “absolutely entitled to repayment under all circumstances.” Red flags for recharacterization include reconciliation provisions that are practically impossible to use, fixed repayment terms that function like loan schedules, personal guarantees that let the funder collect regardless of business performance, and security interests in the merchant’s assets.⁷

In Essential Foundations, the court applied a three-factor test and found CFG’s contract on the MCA side of the line: it allowed adjustments to daily payments based on actual receipts, had no fixed maturity date, and included a clause stating CFG assumed the risk of nonpayment if the business went bankrupt. CFG has so far avoided recharacterization in the cases where the issue has been raised.⁵ The broader legal environment is shifting, though. In January 2025, the New York Attorney General secured a judgment exceeding $1 billion against Yellowstone Capital for agreements the state characterized as illegal loans disguised as MCAs, canceling over $534 million in outstanding merchant debt.⁸

Complaints Outside the Courtroom

Beyond the lawsuits, merchants have filed complaints against CFG with the Better Business Bureau. As of mid-2026, the BBB lists 13 complaints against CFG Merchant Solutions in the prior three years, six of them closed in the most recent twelve months. Common allegations include unauthorized or excessive withdrawals from bank accounts, disputes over whether balances are correct, aggressive collection tactics, and confusion about contract terms.⁹

Several complaints allege that CFG kept debiting bank accounts after agreeing to pause payments, causing overdraft fees. Others claim CFG or its collection partners filed liens against third-party payors like insurance companies without adequate notice, or contacted business owners’ personal employers and customers. At least one complainant alleged an effective rate equivalent to 300%. Merchants who sold or closed their businesses have said CFG continued pursuing them personally.⁹

CFG’s responses follow a consistent line: its product is a purchase of future receivables rather than a loan, so there is no APR; merchants who took advances and then defaulted are bound by the contract; and lien filings are a standard enforcement mechanism accompanied by proper notice. Of the 13 complaints, 12 are marked “Answered” (meaning CFG responded but the merchant did not accept the response or did not follow up) and one is marked “Resolved.”⁹ CFG holds an A+ rating with the BBB.¹⁰

What Changed in 2019: Confessions of Judgment

The collection tools available to CFG and other MCA companies narrowed in 2019. Before then, MCA companies routinely had merchants sign confessions of judgment during the application process, then filed them in New York courts when a default occurred, sometimes freezing merchants’ bank accounts before the merchant knew a judgment had been entered. Governor Cuomo signed legislation on August 30, 2019, prohibiting the filing of confessions of judgment against out-of-state debtors in New York. For business entities, a confession can now only be filed in a county where the debtor actually has a place of business.¹¹

That change is part of why CFG’s recent collection efforts run through ordinary breach-of-contract suits, with summary judgment motions supported by employee affidavits and payment records. It is also why the evidentiary rulings against the company matter: those motions are now the primary route, and the courts have been checking the paperwork closely.

1
Findlaw. CFG Merchant Solutions v Complete Automotive Repair Service
2
SEC.gov. CFG Merchant Solutions Purchase Agreement
3
CaseMine. CFG Merchant Solutions v Home Media Tech FL
4
Findlaw. CFG Merchant Solutions v Valentis Security Services
5
Justia. CFG Merchant Solutions v Essential Foundations Preschool & Learning Ctr
6
Justia. People v Yellowstone Capital
7
Pullman & Comley. When Is a Merchant Cash Advance Really a Loan
8
Fintech and Digital Assets. NY Attorney General Secures $1 Billion Judgment for Illegal Loans Misrepresented as Merchant Cash Advances
9
Better Business Bureau. CFG Merchant Solutions Complaints
10
CFG Merchant Solutions. About Us
11
NY Courts. CFG Merchant Solutions v Valentis Security Services