Post by Logan on Feb 27, 2017 18:13:21 GMT -6
The FTC says Joel Tucker defrauded his brother's payday-lending company
To Tylor Johnson, it looked like the deal of a lifetime.
The Colorado-based debt broker had been angling for years to buy a debt portfolio from Scott Tucker. In the world of payday loans, Tucker was King Kong. He had pioneered an entire industry — one sturdily rooted in the Kansas City area — by using the internet to make short-term loans at loan-shark interest rates. Tucker turbocharged his profits by structuring his loans so that hidden finance charges could double or triple a $390 principal in a matter of months. And his maze of secretive shell companies had allowed him to largely evade lawsuits and regulation.
It added up to big money: Tucker’s umbrella entity, AMG Services, was estimated to be worth billions.
That also meant that Tucker’s debt portfolios (“paper,” in industry slang) would be worth a mint on the secondary market. It’s common for lenders like AMG to eventually “charge off” delinquent accounts — that is, to bundle defaulted loans into a portfolio and sell it to a third-party debt collector, which attempts to scratch back money from the borrowers. For some reason, though, AMG kept all its accounts in-house. To the great disappointment of debt buyers like Johnson, the biggest online payday lender in the country was stubbornly unwilling to part with its paper.
But Johnson thought he might have an edge. Tucker’s brother Joel Tucker was also active in online lending, and back in 2010, Johnson had bought paper from one of Joel’s entities. Johnson had stayed in touch, partly because he figured a relationship with Joel might eventually open the door to buying Scott’s paper.
Read more: www.pitch.com/news/article/20852148/the-ftc-says-joel-tucker-defrauded-his-brothers-paydaylending-company
To Tylor Johnson, it looked like the deal of a lifetime.
The Colorado-based debt broker had been angling for years to buy a debt portfolio from Scott Tucker. In the world of payday loans, Tucker was King Kong. He had pioneered an entire industry — one sturdily rooted in the Kansas City area — by using the internet to make short-term loans at loan-shark interest rates. Tucker turbocharged his profits by structuring his loans so that hidden finance charges could double or triple a $390 principal in a matter of months. And his maze of secretive shell companies had allowed him to largely evade lawsuits and regulation.
It added up to big money: Tucker’s umbrella entity, AMG Services, was estimated to be worth billions.
That also meant that Tucker’s debt portfolios (“paper,” in industry slang) would be worth a mint on the secondary market. It’s common for lenders like AMG to eventually “charge off” delinquent accounts — that is, to bundle defaulted loans into a portfolio and sell it to a third-party debt collector, which attempts to scratch back money from the borrowers. For some reason, though, AMG kept all its accounts in-house. To the great disappointment of debt buyers like Johnson, the biggest online payday lender in the country was stubbornly unwilling to part with its paper.
But Johnson thought he might have an edge. Tucker’s brother Joel Tucker was also active in online lending, and back in 2010, Johnson had bought paper from one of Joel’s entities. Johnson had stayed in touch, partly because he figured a relationship with Joel might eventually open the door to buying Scott’s paper.
Read more: www.pitch.com/news/article/20852148/the-ftc-says-joel-tucker-defrauded-his-brothers-paydaylending-company