On September 30, 2016, a federal district court in Nevada granted summary judgment to the Federal Trade Commission (“FTC”) against the remaining defendants in the FTC’s lawsuit against payday lender AMG Services Inc. and various related individuals and entities.  The court ruled against race car driver Scott Tucker, whom it found individually liable as a controlling person of AMG and other corporate defendants, and against the corporate defendants themselves.  The court imposed a $1.3 billion judgment on the defendants, the largest litigated judgment ever obtained by the FTC.  The court’s order also bans Tucker and his companies from any aspect of consumer lending, and prohibits them from conditioning the extension of credit on preauthorized electronic fund transfers, misrepresenting material facts about any good or service, and engaging in illegal debt collection practices.

In its 2012 complaint, the FTC alleged that AMG misled consumers as to the true costs of the loans it made.  Specifically, the FTC alleged that AMG told borrowers it would charge them the loan amount and a one-time finance fee, but instead AMG initiated multiple withdrawals from borrowers’ accounts and charged a finance fee each time.  The result was that consumers ended up paying much more than the disclosed cost of the loan.

The court had previously ruled that this practice was misleading, and several corporate defendants subsequently settled with the FTC.  In holding Scott Tucker individually liable in its September 30, 2016 order, the court found that Tucker had authority to control the corporate defendants and was at least recklessly indifferent to the misconduct that was taking place, because he reviewed marketing materials and loan documents and was aware of complaints from consumers indicating their confusion.  The $1.3 billion judgment represents the difference between the amounts consumers were told they would pay under the loans and the amounts they actually paid.