Scott Tucker may not be a household name to you, but the former American Le Mans Series champion is all too familiar to those who he fleeced with his many payday loan businesses. If you are a fan of racing, you might take pride in knowing that thousands of individuals who went to one of Tucker’s loan businesses helped to fund his racing team. The racecar driver is on the wrong track.
If you are even a bigger fan of ethical behavior, you might not appreciate Scott Tucker if I were to tell you that he is about to be sent to prison for more than 16 years for gouging his customers and his payday loan empire is about to be fined the whopping sum of $1.3 billion. Tucker’s lawyers, of course, bought the size of the fine and a panel of three new judges upheld the settlement.
Imagine taking out a payday loan of $300, not reading the fine print, and having to pay up to $600 in fees. Sometimes customers were paid to pay more than 1000 percent in interest. Tucker’s empire included Ameriloan, Cash Advance, OneClickCash, Preferred Cash Loans, United Cash Loans, US FastCash, 500 FastCash, Advantage Cash Services, and Star Cash.
The payday loan companies, despite all of the different names, had one common trait: the information in fine print failed to properly disclose the actual terms of the various loans. In fact, the undisclosed fees were illegally charged and inflated fees were hidden.
Tucker’s empire made billions of dollars on the backs of some of the nation’s poorest and most vulnerable people. They were people who often didn’t have a grasp of the language, or were living paycheck to paycheck or who frequently lacked the knowledge or credentials to have a checking account. All of the elements of fraud were clearly evident in Tucker’s multi-billion-dollar scam.
It has been estimated that close to 1 percent of the U.S. population “visited” one of Scott Tucker’s locations. He and his marketing people understood that those individuals who needed payday loans had no voice, weren’t very sophisticated and could not easily complain. They were trapped by the system and they couldn’t understand that the game was rigged against them. The bottom line for Scott Tucker was that he had a trapped audience willing to pay whatever they had to pay in order to get enough cash with which to live.
There are two sets of needs at play. Certainly, the customers needed the money, even at exorbitant rates, to make it through until the next payday. That is the obvious need. The much bigger need was the multi-billion-dollar organization’s need to keep expanding its empire. I am sure that after a time Tucker’s racing team was of less and less importance, but his need to increase his wealth through unethical and illegal payday loans was a much more empowering need.
The rationalization aspect of this fraud should be limited to what we know rather than what we feel. We know that Scott Tucker is a wealthy man, with many privileges that come with that wealth. He lived in an insular world surrounded by others who felt and acted as he felt and acted. He was loaning money to those who were almost the polar opposite of him. They were not hip or cool or remotely wealthy in the monetary sense. Many were virtually homeless, living in shelters or low-cost housing.
I can’t say if Scott Tucker or the many hundreds of location managers in his organization had cultural or racial biases, but I would not dismiss the possibility. They rationalized their behavior into “them” and “us.” It is sad and unfortunate, but not all that rare. In the absence of ethics, this is the unfortunate outcome we often see.
Across the country, states are now endorsing legislation to curb predatory lending. The legislation is passing as voters have been made aware of the problem. However, legislation will never replace ethical training. Somewhere, somehow, the unethical are still seeking ways to commit fraud against the most vulnerable. The racecar driver is on the wrong track.