Scott Tucker, a professional race car driver, and others owe the Federal Trade Commission (FTC) approximately $1.2 billion after deceiving thousands of payday loan customers, says a Nevada federal judge in an issued judgment on Friday.
According to U.S. District Court of Nevada Judge Gloria Navarro, Tucker’s payday loan company harmed many of its customers because of various misleading loan terms. Because of this deception, clients that borrowed a $300 payday loan were required to pay $975 back to the business.
He will be prohibited from participating in the consumer lending business moving forward.
“Scott Tucker did not participate in an isolated, discrete incident of deceptive lending, but engaged in sustained and continuous conduct that perpetuated the deceptive lending since at least 2008,” the judge said in her ruling, reports the Associated Press.
Reportedly, Tucker claimed ignorance to federal law and argued that his businesses maintained short-term, high-interest credit standards under industry norms. He added that he was unaware of any wrongdoing and highlighted that he had no intentions of deceiving consumers.
Navarro was not having any of it as she alluded to evidence confirming her ruling.
One of the pieces of evidence included an email from one of his employees, which showed clients offering complaints regarding confusion about the payday loans. Another email from a manager of one of the payday loan stores suggested a new loan repayment model due to the fact that “90 percent of the issues we have with customers stem from them not understanding our process of renewals and paydowns.”
The judge’s $1.266 billion ruling will impact Tucker, the estate of his deceased brother and several corporate entities within the confines of the Tucker business, like Black Creek Capital Partners, Broadmoor Capital Partners and AMG Capital Management. His will wife will also be required to pay $19 million to the FTC.
In 1998, Tucker and his brother, Blaine, launched a payday loan company called National Money Service. After expanding into various business entities, the private firm started to get into trouble.
In 2012, the FTC filed charges against both men and their businesses, alleging that the payday loan establishment maintained usurious interest rates. Recently, Tucker faced criminal charges in New York, where it’s charged that he ran a $2 billion payday loan business that took advantage of nearly five million consumers, even though the state has banned payday loans or has implemented usury limits.
Bradley Weidenhammer, an attorney for two payday lending companies connected to Tucker, did not issue a public statement in regards to the judge’s ruling.
Blaine Tucker committed suicide in 2014 and Scott Tucker says he has not done anything wrong.
The latest penalties against Tucker will be the biggest in the war on payday lending giants. Across North America and Europe, authorities are trying their hardest to rein in the industry and to make the payday loan moguls accountable for their actions, policies and alternative financial products.