Despite the fact that Missouri’s numerous traditional payday loan outlets have been the target of community rage and reform attempts during the last few years, a far more sinister process has flourished across the state line in Overland Park.
As reported by a class-action suit, Johnson County entrepreneur Scott Tucker for many years has presided over a huge web of online payday loan operations. Another lawsuit brought by the Federal Trade Commission claims that these operations attempt to trick and entrap clients.
Tucker, 50, looks for fame on the car racing circuit and travels between his house in Leawood’s expensive Hallbrook area to his $8 million vacation house in Aspen, Colorado, in a private jet.
As reported by the FTC suit, Tucker and associated companies and people offer short-term loans. But rather than claim a one-time lending fee on an predetermined date, the providers obtain access to clients’ banking accounts and make a number of withdrawals, coming up with a new lending fee each time.
In a frequent case, a client obtained $300 and got a loan disclosure saying she’d pay a $90 lending fee. Therefore the loan should have cost $390. When the woman shut down her bank account, it had been depleted of $735.
Numerous government bodies have been on to Tucker since at least 2003, when the Kansas Bank Commission brought an enforcement action against one of his businesses. Authorities in no less than 5 states have made an effort to close down his companies.
Tucker evaded authorities by building joint ventures with small American Indian tribes. By declaring to be a simple employee of tribal-owned companies, Tucker was able to maintain sovereign immunity from federal authorities.
If all of this seems preposterous, fantastical perhaps, it really is.
“Some businesses set up off shore to attempt to hide from law enforcement. … Tucker managed to disguise (his company) at an office park in suburban Kansas City,” said David Heath for iWatch News, a service of the Center for Public Integrity.
Jeffrey Morris, a Kansas City attorney employed by Tucker, stated his client would strongly fight the assumption of the class-action suit – that Tucker, not the Native Indian tribes, is the owner of the companies and has broken a number of regulations.
Yet another lawyer, Timothy Muir, stated the business methods of the tribes are “entirely agreeable with federal laws.” Muir himself is a defendant in the FTC suit, much like Tucker and seventeen other people.
The examination and class-action suit, however, have provided information to indicate that Tucker, not the tribes, is managing the show.
Banking accounts for a company evidently belonging to an American Indian tribe are employed to take care of Tucker’s $13 million jet, for instance.
If accusations are legitimate, Tucker and affiliates made a lot of money by cleaning up the bank accounts of individuals distressed enough to look for short-term loans online. In the mean time Tucker has lived in polite community in Kansas City and other places, even getting supportive opinions for his racing pursuits.
The point of all this is that people will invariably look for methods to deprive people of their cash – and the less cash a person has, the more susceptible he is to being conned.
A suggested Missouri ballot project restricting annual rates of interest on payday loans at 36 % would certainly do much to restrain the violations that take place in the state. Nevertheless acts of usury will go on as long as they’re accepted and even abetted by those who consider their own hands clean.
In addition to the Missouri law, well known banks are main enablers of payday lending. They offer credits and keep accounts for short-term lending companies.
“If consumer banks choose not to give funds to businesses in our market or to us, our capacity to borrow at reasonably competitive rates (or at all), our capacity to run our company and our funds access would probably be influenced in a very negative way,” QC Holdings, one of the nation’s payday loan titans, said in a Securities and Exchange Commission filing.
Just like Tucker’s enterprise network, QC Holdings has its head office in Overland Park. That’s a coincidence; there’s no business connection. However local banks and other companies have created a mutually advantageous partnership with one of the nation’s biggest payday lenders, as well as with a dubious online payday loan business.
The FTC action attempts to close down the online network and make Tucker and others compensate people apparently hurt by their actions. The class-action suit also wants compensation. Meanwhile, business keeps going full tilt at 10895 Lowell Ave. in Overland Park, where Tucker’s company employs hundreds of people.
Consumers watch out.