Payday Lenders Agree to Pay $21 Million in Largest FTC RecoveryDavid McLaughlin
Payday lending companies affiliated with Scott Tucker, a racecar driver on U.S. and European circuits, settled U.S. claims that they charged consumers undisclosed and inflated fees.
AMG Services Inc. and MNE Services Inc. will pay $21 million, the largest recovery in a payday lending case brought by the Federal Trade Commission, the agency said Friday in a statement. In addition to the $21 million penalty, AMG and MNE will waive $285 million in charges assessed against consumers but not collected, the FTC said.
“The settlement requires these companies to turn over millions of dollars that they took from financially-distressed consumers,” Jessica Rich, director of the FTC’s bureau of consumer protection, said in a statement.
Brad Weidenhammer, an attorney for AMG and MNE, didn’t immediately respond to a phone message seeking comment.
The FTC sued AMG and other companies affiliated with Tucker in 2012, alleging they piled on undisclosed and inflated fees, and collected on loans illegally by threatening borrowers with arrest and lawsuits. Tucker is a signatory on the accounts of AMG and MNE and is an employee of AMG, according to the FTC’s complaint.
The FTC also said AMG and other companies also paid his personal expenses, including luxury cars, private jets and mortgage and maintenance of a home in Aspen, Colorado. The agency claimed that Tucker and his co-defendants regularly transferred tens of millions of dollars to Tucker’s racing company, known as Level 5 Motorsports, for what they called sponsorship fees that benefited Tucker’s automobile racing.
Tucker, who started racing in 2006 and whose endeavors were chronicled in a 2010 documentary entitled “Daytona Dream,” has also served as a test driver for Ferrari’s 599XX super car, according to Level 5’s website.
Federal prosecutors are preparing to bring charges against Tucker for deceiving borrowers about the cost of loans, Bloomberg reported in December.
The case is is Federal Trade Commission v. AMG Services Inc. 12-cv-00536, U.S. District Court, District of Nevada (Las Vegas).