The Federal Trade Commission has taken sweeping action against California-based Seek Capital and its founder and CEO, Roy Ferman, alleging they operated a deceptive financing scheme that misled small business owners and cost them more than $37 million.
In a complaint filed in federal court, regulators say Seek Capital targeted new and aspiring entrepreneurs searching online for business loans, touting itself as a “market leader” that could quickly secure tens of thousands of dollars in liquid capital. Instead, the FTC alleges, Seek charged clients thousands of dollars merely to open multiple credit cards in their names—often without their knowledge or consent.
High-Pressure Sales and Hidden Fees
According to the complaint, Seek used aggressive telemarketing tactics, promising “cold hard cash,” “business lines of credit,” and special relationships with lenders. But once business owners enrolled, the company allegedly began submitting applications for personal credit cards—applications the consumers never saw, approved, or signed.
Seek then billed clients a fee equal to 10% of the total credit obtained, a charge that often amounted to thousands of dollars. Many customers first realized credit cards had been opened in their names after receiving alerts about drops in their credit scores or letters from banks approving or denying applications.
The FTC also alleges the company charged early termination fees of up to $995, even when consumers tried to cancel before any applications were submitted.
One business owner quoted in the complaint said the scheme nearly forced them to shut down: “My business plan got stalled… My credit has still not recovered even though it has been almost one year.”
Manipulated Reviews and Illegal Gag Clauses
Regulators say Seek padded its online reputation by pressuring clients to leave five-star reviews before receiving any funding, deleting negative reviews, and asking employees to post positive ones. Its contracts also unlawfully barred customers from posting negative feedback, violating the Consumer Review Fairness Act.
Court Ruling and Permanent Industry Ban
In September, a federal court granted most of the FTC’s request for summary judgment, finding that Seek and Ferman misrepresented their lender relationships, funding terms, fee structure, and impact on credit scores. The court also found that the company violated the Telemarketing Sales Rule and that Ferman was personally liable.
Under a final order entered October 1, 2025, Seek Capital and Ferman are permanently banned from offering business financing, debt relief, or credit repair services. The order also prohibits misrepresentations, unauthorized billing, telemarketing violations, and restrictions on consumer reviews.
The court imposed a monetary judgment of $48.28 million, though the amount is partially suspended based on the defendants’ inability to pay. The full sum will come due if they are found to have misrepresented their finances.
“Starting or growing a small business is no easy task, and it is made harder by those who deceive small business owners with false promises of liquid capital,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.
Christopher Mufarrige, also with the Bureau, added: “Instead of offering businesses the financing they sought, Seek Capital took advantage of them and often left them in worse shape.”
