FTC targets alleged payday scam, race car driver
Monday, April 2, 2012
WASHINGTON (AP) -- A payday lending operation that offers quick cash over the Internet to desperate people, and the race-car driver allegedly running it, are under federal scrutiny after more than 7,000 complaints to authorities.
The Federal Trade Commission has filed a complaint in a Nevada court against driver Scott Tucker, his brother and several Internet-based lending companies, including AMG Services, Inc.
Tucker has raced in the American Le Mans Series. The FTC charges that he and others controlled lending companies that piled on undisclosed and inflated fees -- sometimes more than triple the amount borrowed -- and then collected on the loans illegally by threatening borrowers with arrests and lawsuits.
Payday loans are small, short-term loans with extremely high interest rates that are effectively advances on a borrower's next paycheck.