Leawood suicide puts spotlight on troubled payday loan industry
03/11/2014 6:00 PM
03/11/2014 6:00 PM
The suicide of a Leawood man over the weekend puts a spotlight on the often-troubled and greedy side of the payday loan industry, especially its connections to the Kansas City area.
The dead man is Blaine Tucker.As The Star noted in a story
: “Tucker and his brother, businessman and race car driver Scott Tucker, are defendants in a lawsuit filed in Nevada by the Federal Trade Commission over the dealings of their payday loan business, AMG Services Inc.”
In recent months, more attention fortunately has been paid to just how much damage the payday loan industry is doing to thousands upon thousands of people — often with limited financial means — by charging them excessive rates and fees on their loans.
The Tuckers, and a few Kansas City area residents, often are at the center of stories detailing problems within the industry,as a Star editorial pointed out in late 2013.
“Unfortunately, some of the worst practices have roots in the Kansas City area,” The Star opined. “The concentration of online lending operations here is not a point of regional pride, but it does point to a wealth of financial, technical and legal expertise and creativity.”
Articles about payday loan businesses are full of news about legal problems for the operators — often highlighting the Tucker family.
One of the FTC complaints against Blaine and Scott Tucker
, plus others, claimed they “made multiple withdrawals from borrowers’ bank accounts and assessed a new finance fee each time, without disclosing the true costs of the loan.... In many cases, the defendants’ inflated fees left borrowers with supposed debts of more than triple the amount they had borrowed.”
In a comprehensive article,The Pitch last year examined
how not just the Tucker family but others — sometimes connected to the St. Ann Catholic parish in Prairie Village — had made a lot of money in this business.
One sobering excerpt: “But every credible study of the industry has found that the high interest rates and fees these outfits charge are designed to turn the loans into long-term debt burdens on the borrowers. These parishioners were involved in various business interests that enjoy astronomical profits by lending to borrowers at interest rates that commonly reach unholy heights of 700 percent.”
And in 2011, the Center for Public Integritypublished one of the most searing
looks at Scott Tucker and his troubled links to the payday loan industry.
The headline: “Race car driver Scott Tucker drew an elaborate facade around his payday loan businesses.”