Judge orders race car driver and companies to pay record $1.3B restitution in payday-lending scheme
A federal judge in Nevada has ordered race car driver Scott Tucker and several of his lending companies to pay $1.3 billion restitution in a deceptive payday-lending scheme.
The award is the largest litigated judgment ever obtained by the Federal Trade Commission, according to an FTC press release. The $1.3 billion judgment represents consumer losses attributable to the misleading tactics.
Chief U.S. District Judge Gloria Navarro said Tucker and his companies charged undisclosed and inflated fees for payday loans. She ruled (PDF) in a case brought by the FTC in 2012 that claimed Tucker’s company AMG Services had told consumers they would be charged a one-time finance fee, when in reality there were multiple fees.
The FTC had reached a partial settlement with AMG Services and some of the other corporate defendants in July 2013. According to a January story by the Center for Public Integrity, Tucker had set up several shell companies to hide his involvement in AMG Services. The FTC alleged the payday lenders spent $60 million to sponsor tucker’s racing team, Level 5 Motorsports.
Navarro said Tucker was individually liable because he was aware that customers often did not understand the lenders’ renewal and pay-down process.
The payday operation had claimed it was immune from legal action because it was affiliated with Native American tribes, but Navarro disagreed in an earlier ruling.
The case is Federal Trade Commission v. AMG Services Inc.
