The government has obtained a record $1.3 billion civil court judgment against AMG Services, Inc. and Scott Tucker on charges they operated a massive payday lending scheme.
The Federal Trade Commission (FTC) and Department of Justice (DOJ) say $505 million of that amount is being returned to consumers the government says were victims of deception. The defendants were charged with violating both the FTC Act and the Truth in Lending Act.
The case goes back to 2012 when the FTC charged the company told borrowers they would only pay a one-time fee plus the loan amount.
Instead, the government said AMG made multiple withdrawals from consumers’ bank accounts, charging a new finance fee with each withdrawal. Because of that, consumers who borrowed from AMG paid far more for the loans than they had originally agreed to pay.
Last year, the U.S. Attorney’s Office for the Southern District of New York concluded prosecution of Tucker and his attorney by securing convictions on criminal charges. Tucker was sentenced to 16 years in prison.
U.S. Bancorp, the parent company of U.S. Bank, was fined $528 million for violations of the Bank Secrecy Act. Prosecutors said it failed to alert law enforcement to Tucker's suspicious banking activities.
The FTC and DOJ say they are using the money obtained through the civil and criminal cases to make refunds to consumers who took out loans before January 2013 from any of the follow AMG companies:
Advantage Cash Services
Star Cash Processing
Look out for scams
Recipients should deposit or cash checks within 60 days, as indicated on the check. Consumers should also guard against telephone calls from people claiming to be from the government, seeking information or funds to facilitate payment. That's an old scam trick.
The FTC says it has the companies' business records and will use them to identify consumers eligible for a refund and will send the check. The FTC never requires consumers to pay money or provide information to cash refund checks.
While it is not necessary to contact the FTC, consumers who have questions may call the agency at 1-866-730-8147.