For anyone who has ever owned a business these merchant funding emails just saturate your inbox.
Troutman Amin, LLP has never applied for a line of credit and does not have one– we are 100% funded by our clients and the true retainers they provide to enjoy our quality services.
Yet every day I receive emails from merchant funders claiming the firm has been approved for a line of credit it neve applied for.
For instance just today I received an email entitled “LOC – Amount & Terms Review” from somebody named Jackie Donahugh “Portfolio Director” at Sun Capital Funding.
Well in The Sina Firm v. Morgan Cash Inc., 2026 WL 2542774 (C.D. Cal. Aug. 27, 2026) a court held these emails might constitute false advertisements under California law– and even allowed a TCPA claim to proceed under the statute’s DNC rules even though the cell phone was owned by a law firm.
In The Sina Firm, the Plaintiff was a law firm– just like Troutman Amin, LLP– that received numerous unwanted emails pitching merchant services. Unlike Troutman Amin, LLP, however, The Sina Firm actually had applied for a line of credit and was turned down! Despite the turn down the company kept emailing the firm claiming it had qualified for loans it had not qualified for.
The Court found this could constitute false advertising under California law and could also violate the state’s version of CAN-SPAM– so watch out anyone who thinks it is a good idea to falsely suggest consumers or companies have qualified for loans they have not actually qualified for yet.
More germanely for this blog, the Court allowed a DNC claim to proceed against the merchant lender because it allegedly sent 3 text messages to the law firm’s cellular phone number.
Pause.
This part of the decision is a little odd because a phone must be “residential” in order for a DNC claim to be available to the owned of the line. But here the Plaintiff is a law firm –so how can the phone be residential? Yes, the Plaintiff alleged the phone was used for mix use–i.e. sometimes it was used for personal purposes– but the person who uses it for personal purposes would have standing to bring that claim and not the law firm.
Presumably the law firm paid for the phone which is why it sued on this claim but this is the old “called party” problem– the law firm cannot have standing to sue for calls that are only actionable by a person. At least that’s my view.
The Court disagreed and allowed the law firm to sue directly for the calls despite the fact the law firm is a business– which I am fine with in this case because these merchant funder guys need to be reigned in a bit but I really don’t like this doctrine more broadly.
We will keep an eye on this.
Take aways:
- It is NOT legal to send emails that falsely suggest a consumer/business has qualified for a loan they have not qualified for (or even applied for) so stop doing it;
- The DNC’s limitation for call made to “residential” numbers provides VERY little protection for calls/texts made to cellular phone numbers–so be careful in the B2B context.
One odd note, this case was brought by the Geregos Law Group. Haven’t seen them bring TCPA suits in the past so will keep an eye on that as well.
Also if you haven’t caught Deserve to Win Ep. 47 year– the one where the Dame makes partner- you’re behind! This is required viewing for anyone who wants to be caught up on TCPA issues folks! Ep 48 drops later today!
Chat soon!