$505 million back for payday loan customers – and two messages for business

For consumers who took out loans with online payday lender AMG, the company’s illegal tactics left many of them saying OMG. But finally there’s good news for AMG customers arriving in the form of $505 million in refund checks just mailed to people who borrowed money between January 2008 through January 2013. That’s the largest amount ever sent in a refund program run by the FTC. At the same time, we have two messages for companies: a law enforcement warning to those who engage in similar shady tactics and a favor to ask of reputable members of the business community.

When consumers turned to AMG for online payday loans, they agreed to pay the company a one-time finance fee, but an emboldened AMG helped themselves to more – and more and more. Add up AMG’s hidden fees and unauthorized withdrawals and people ended up paying far more for the loans that the agreed-upon amount. For example, a consumer who took out a $300 loan agreed to pay back $390. But by the time AMG finished fleecing the account, the consumer actually had to pay $975. And remember: These were folks already struggling to make ends meet.

The FTC sued AMG and Scott A. Tucker for a long list of law violations. In 2016 a United States District Judge ruled that the defendants had engaged in a host of illegal practices. Then in 2017, a federal jury in New York convicted Tucker and his attorney Timothy Muir for crimes related to the lending scheme. Tucker was sentenced to more than 16 years in prison.

Although portions of the cases remain on appeal, the FTC and the Department of Justice have already obtained $505 million in settlements as a result of those law enforcement actions and related ones. And the FTC is sending that money right back where it belongs: to the more than one million consumers who were injured by AMG’s illegal actions.

Checks will be sent to consumers who took out loans between January 2008 and January 2013 from these AMG-related companies: 500FastCash, Advantage Cash Services, Ameriloan, OneClickCash, Star Cash Processing, UnitedCashLoans, and USFastCash. There is no application process and those consumers don’t have to do anything to get money back. The FTC and a refund administrator have used AMG’s business records to identify eligible consumers and calculate their refunds.

Consumers should cash their checks within 60 days. If they have questions – or if they borrowed from those lenders before January 2008 – they can call 1-866-730-8147. The FTC’s AMG refund page has more information.

In addition, the FTC has a law enforcement warning for companies contemplating similar tactics. It’s always bad business to engage in deceptive and unfair practices. But law enforcement agencies are particularly troubled when companies kick cash-strapped consumers when they’re down. And depending on the facts, questionable business practices can subject companies, individual corporate officers, and their attorneys to criminal prosecution.

Now for that favor we’re asking of business executives. HR professionals report that employees’ financial worries can affect their job performance. With more than a million checks going out to people who got payday loans from AMG, chances are you have an employee or two struggling to make ends meet. The FTC has free resources for consumers trying to get out of debt. An article on the break room bulletin board or information available through your HR team may be the first step toward helping them get their financial houses back in order.