Credit Card Industry Needs More Regulation According to Insider, Ari Page

We're all familiar with credit cards, but there's an aspect of the industry that most people are unaware of that's used by business owners who need cash fast called credit card stacking.

In a nutshell, it's a way to open up several business credit cards at once, typically at a 0% introductory rate, unlocking as much as $250,000 in total credit. Business owners can do this on their own or hire a company to help them through it.

This practice is legal and common, and despite being heavily regulated, in many ways, it's still the Wild West.

But industry insider, Ari Page, wants to change that.

Over the last few years, the Federal Trade Commission has been cracking down on several companies in this space for what it considers deceptive practices. And Page, one of the best known names in the industry, wants to see even harsher punishments for the bad players

He first stumbled on the concept of business credit card stacking as a real estate investor looking for a way to fund unconventional deals. At first, he used it as a strategy to fund his investing, but then he started thinking bigger and eventually launched Fund&Grow, a consulting firm that helps other entrepreneurs use the same strategy to get funding for their own businesses. That was over two decades ago.

He says his company has helped tens of thousands of business owners get access to more than two billion dollars in credit, and throughout its entire existence, has never faced an FTC enforcement action or a CFPB complaint.

But Page says he's seen a lot of companies skirt or even outright break the law in this industry.

"Marketing is the area where I see business credit card stacking companies ignore consumer protection laws the most. They'll often misrepresent the service they're offering, framing it as a business loan rather than business credit cards, act as if they're the lender, or even just apply on their customers' behalf without doing anything substantive to help maximize their clients' results," he explains.

Page says the FTC is very clear that a business credit card stacking company has to do more than just apply for their clients. His firm operates differently than most, both because it's the law and because he wants to ensure his clients get the greatest impact.

He has an entire division dedicated to researching the constantly changing offers from business credit card companies so his team can advise clients on the best strategic options for their goals, then another division walks them through the application process, and once approved, helps them to negotiate higher credit limits. Over the next six months, his team coaches clients on how to best utilize their new business credit cards while staying in compliance so that they can increase their credit limits for access for even more capital to scale.

But most companies don't do that. Page says his industry has gotten a bad name because of a handful of companies acting in bad faith.

He wants that to change, and writes often on the topic for publications like Tampa Bay Business & Wealth and has even discussed it on TV news programs, like Fox 13 with Blake DeVine.

Unfortunately, the problem has been getting bigger, especially as the economy has been getting softer, and as a result, the FTC has gone after several credit stacking companies recently to combat the issue.

Seek Capital is one of the most visible examples. In this case, the firm marketed their service as business loans, but they were actually providing personal credit cards. As a result of their deceptive practices, a federal judge approved a $48 million judgment against Seek Capital and its CEO, who is now permanently banned from the industry for good. Seed Consulting also ran afoul of FTC regulations by fraudulently inflating reported household incomes for their clients by more than $100,000 on credit card applications to get approved—all without their clients' knowledge, leading to a $2 million settlement. Growth Cave added credit stacking as a service and got in serious legal trouble because of compliance issues, while Nudge LLC partnered with Seed Consulting and was pulled into their mess.

These cases make one thing clear: The FTC is serious about this issue and they're not just going after the credit stacking companies—they're going after everyone connected to them.

Marketing is the first step in the equation, and often the most visible which makes it easy for regulators to find companies that aren't playing by the rules. A common theme that keeps showing up is companies misrepresenting credit cards as "loans" or promising to "convert credit to cash," even though that's a direct violation of the terms laid out by credit card companies like Visa, Mastercard, and American Express.

Another common issue is misrepresenting what clients were getting, by applying for personal credit cards that report on a client's personal credit profile, instead of business credit cards that only report on their business credit profile unless they default. This pushes regulatory matters under the scope of the Credit Repair Organizations Act, which has strict requirements designed to protect consumers.

Page says these aren't just small legal slip ups and he believes they cause real harm.

A business owner who thinks they're getting a loan tends to make different money decisions than someone who knows they're taking on credit card debt with a rate that can change. And a personal credit card can hurt someone's individual credit score in a way a business card usually doesn't. So instead of waiting for regulators to fix the problem, Page decided to take action to clean up his industry.

He recently launched the Association of Credit Card Stacking Standards, or ACSS, and while he's the founding chair, he didn't build it by himself. He's brought several of his own competitors onto the group's board, along with Robby H. Birnbaum, an attorney at Greenspoon Marder LLP who focuses on FTC and CFPB compliance.

That's worth noting. Page isn't just setting rules for his own company—he's trying to get rival firms to agree on one shared standard for the whole industry. If it actually works the way he plans, it could mean real buy-in from companies that don't usually have a reason to help each other out.

The ACSS standards call for companies to be upfront about what they're selling, to skip personal credit cards completely, to post their prices online instead of hiding them until a sales call, and to walk customers through every card's terms before they apply. Companies would also need to make sure customers understand they're personally liable for the debt, even though it's for the business. On top of that, the group wants companies to give realistic timelines. Some companies promise funding in two or three days, but Page says a real first round usually takes two to three weeks. Most importantly, Page says, "membership requires more than just claiming compliance—members are required to submit to regular compliance audits conducted by the organization."

But his boldest idea might be his call for harsher punishment.

He points out that the $48 million judgment against Seek Capital was mostly suspended because the company said it couldn't pay. Page thinks that lets bad actors off too easy, and he wants penalties that actually stick.

That puts him in an interesting spot. He's also criticized other government efforts to regulate financial products, like the proposed interest rate cap. So it's fair to ask what makes credit stacking different for him, and why he thinks tougher enforcement is the right answer here specifically.

Page explains it this way: "I'm generally not a fan of more government regulation, but the reality is that there are some predatory companies in this industry, and they're putting their clients and their affiliates in a potentially financially devastating position through their actions. Business owners and affiliated companies that want to help their clients are coming to these companies because they see them as 'the experts,' and that blind trust hurts them when they follow bad advice. Unfortunately, if they're not going to self-police, the government has to get more involved to protect consumers."

It's still too early to know how much influence the ACSS will actually have, or whether the FTC will take any of Page's ideas seriously. But his effort points to something bigger happening across the credit stacking industry. Enforcement actions keep piling up, and it looks like at least some companies are trying to clean things up before regulators force their hand.

For now, business owners thinking about credit card stacking should ask plenty of questions before signing on with any company. Knowing exactly what they're buying, whether it's a credit card or a loan, and how it could affect their personal credit, is the best protection they have.