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June 05, 2014
FTC wins case against payday lender
June 6, 2014 – A U.S. district judge ruled in favor of the Federal Trade Commission in its suit against AMG Services for deceptive payday lending practices used with more than 5 million consumer loans.
FTC sued the company because of its frequent imposition of undisclosed charged and inflated fees, which could leave a borrower with as much as three times as much debt as the amount borrowed. In its release, FTC cited a "typical example" of a borrower being told by the company that a $500 loan would cost $650 to repay, but then being charged $1,925.
In March, the judge ruled in favor of FTC in the same case after the defendants claimed that affiliation with Native American tribes kept them outside the agency's jurisdiction – a claim the judge ruled was incorrect under the Federal Trade Commission Act.
Last year, the FTC reached a partial settlement with the same company preventing it from continuing to use threats of lawsuits or arrests as a tactic to collect debt. Damages in the latest ruling have yet to be imposed.
FTC sued the company because of its frequent imposition of undisclosed charged and inflated fees, which could leave a borrower with as much as three times as much debt as the amount borrowed. In its release, FTC cited a "typical example" of a borrower being told by the company that a $500 loan would cost $650 to repay, but then being charged $1,925.
In March, the judge ruled in favor of FTC in the same case after the defendants claimed that affiliation with Native American tribes kept them outside the agency's jurisdiction – a claim the judge ruled was incorrect under the Federal Trade Commission Act.
Last year, the FTC reached a partial settlement with the same company preventing it from continuing to use threats of lawsuits or arrests as a tactic to collect debt. Damages in the latest ruling have yet to be imposed.
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