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Another PayDay Lender Found Guilty In FTC “Truth In Lending” Crackdown

In yet another case of crackdown on payday lenders, the Federal Trade Commission (FTC) has won against AMG services for deceiving consumers by imposing hidden charges and inflated fees on loan amounts.

The ruling came after US District Judge Gloria M. Navarro found many cases where the defendant was charging the consumers almost triple the borrowing amount by imposing hidden charges and inflated fees, according to the FTC website.

In 2012, the FTC sued AMG services for violating the Truth in Lending Act by providing inaccurate loan information to borrowers and the Electronic Fund Transfer Act by requiring consumers to preauthorize electronic withdrawals from their bank accounts as a condition of obtaining credit, according to the FTC.

Navarro found key portions of loan documents “convoluted,” “hidden,” and “scattered.”  The court also found that AMG employees were “instructed to conceal how the loan repayment plans worked in order to keep potential borrowers in the dark.” The defendant was found to have used deceptive loan documents for over five million consumer loans.

In a partial settlement, AMG services has been barred from using threats of arrest and lawsuits for collecting debt from consumers, and from requiring borrowers to agree in advance to e-withdrawals from their bank accounts to obtain credit, according to the FTC website.

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