Imagine you made a $500 payday loan and you agree to pay $650 to repay, but later found out the real charge was $1,925 to pay off the same $500 loan.
The Federal Trade Commission (FTC) says this payday lender, AMG Services, controlled by race-car driver Scott Tucker and his Native American tribe friends, ripped-off at least five million consumer loans with deceptive loan documents.
In the latest court action AMG was barred from using threats of arrest and lawsuits as a tactic for collecting debts, and from requiring all borrowers to agree in advance to electronic withdrawals from their bank accounts as a condition of obtaining credit.
When the FTC sued AMG in 2012, it alleged that they violated the FTC Act by piling on undisclosed and inflated fees, and by threatening borrowers in debt collection calls with arrest and lawsuits. The defendants violated the Truth in Lending Act by giving inaccurate loan information to borrowers, and the Electronic Fund Transfer Act by requiring consumers to preauthorize electronic withdrawals from their bank accounts as a condition of obtaining credit, according to the FTC.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad.