The FTC’s lawsuit against AMG Services, Scott Tucker, and others challenged deceptive and unfair payday lending and debt collection practices that targeted cash-strapped consumers. The case has already resulted in an important ruling related to the scope of the FTC Act. But an order granting the FTC’s Motion for Summary Judgment includes a history-making provision: a $1.3 billion financial remedy – the largest ever in a litigated FTC case.

The complaint alleged that a web of related companies and individuals engaged in a host of practices that violated the FTC Act, the Truth in Lending Act, and the Electronic Funds Transfer Act. For example, the defendants falsely claimed they would charge borrowers the loan amount plus a one-time finance fee. Instead, they dipped into consumers’ bank accounts over and over again, assessing a new fee each time.

The defendants – who had entered into agreements designating a number of tribes as “authorized lenders” – initially argued that the FTC lacked the authority to enforce the law against tribes and tribal businesses. The District Court held otherwise, ruling that “the FTC Act is a federal statute of general applicability” that “grants the FTC authority to regulate arms of Indian tribes, their employees, and their contractors.”

After ruling on jurisdiction, the Court moved to the question of how the defendants’ practices affected consumers. The Court concluded that the defendants had illegally imposed undisclosed charges and inflated fees. That’s when many of the defendants settled – except for Scott Tucker and a tangle of payday loan marketing and servicing companies he founded and controlled. As the evidence demonstrated, Tucker deceived millions of consumers and used the ill-gotten proceeds to fund his own racecar team.

In granting the FTC’s Motion for Summary Judgment, the Court rejected the remaining affirmative defenses asserted by the defendants and held that Scott Tucker was individually liable. The Court cited Ninth Circuit caselaw for the proposition that “An individual may be held liable for corporate violations of the FTC Act if the individual: (1) participated directly in, or had the authority to control, the unlawful acts or practices at issue; and (2) had actual knowledge of the misrepresentations involved, was recklessly indifferent to the truth or falsity of the misrepresentations, or was aware of a high probability of fraud and intentionally avoided learning the truth.”

The Court ruled that the FTC prevailed on the first prong of the test because “the evidence abundantly establishes that Scott Tucker participated in and had authority to control the Lending Defendants.” As for the second prong, “The evidence demonstrates that, at the very least, Scott Tucker was recklessly indifferent to the misleading representations of the Lending Defendants.” You’ll want to read the order for details about the kinds of day-to-day conduct the Court found relevant, but among them are Tucker’s review of loan documents, his comments on proposed changes to webpages, his knowledge of consumer complaints, and his receipt of an in-house email reporting that “90% of the issues we have with customers stem from them not understanding our process of renewals and paydowns.” You’ll also want to pay special attention to the Court’s rulings on common enterprise liability, relief defendants, and the calculation of financial remedies for consumers.

In addition to the $1.3 billion judgment, the order bans the defendants from consumer lending, prohibits misrepresentations about any product or service, prohibits misrepresentations related to debt collection, and enjoins them from conditioning credit on preauthorized electronic fund transfers.