A record $1.3 billion fine was entered at the request of the Federal Trade Commission against multiple corporate defendants and racecar driver Scott A. Tucker for engaging in a payday lending scheme.

In a 2012 complaint, the agency asserted that the operators of AMG Services Inc. promised borrowers that they would be charged only one loan amount and a one-time finance fee. Instead, the FTC said the defendants broke the loan payments into several amounts and then charged borrowers a fee for each withdrawal from their bank account. The unexpected additional fees also left borrowers unaware of the actual amount they were required to pay on their loans, the agency added.

For example, a $300 loan that was advertised as costing $390 to repay would actually cost a borrower $975, the FTC said. As a result, defendants violated Section 5 of the Federal Trade Commission Act, as well as the Truth in Lending Act and the Electronic Funds Transfer Act.

The defendants argued that their operations were affiliated with Native American tribes and therefore immune from legal action. U.S. District Court Judge Gloria M. Navarro held otherwise. That ruling triggered deals between some of the defendants and the agency, including a settlement earlier this year by Red Cedar Services Inc. and SFS Inc., which agreed to pay $4.4 million and collectively waived $68 million in fees to borrowers that were not collected.

Most recently, the FTC moved for summary judgment against the remaining defendants: Tucker, AMG Capital Management LLC, Level 5 Motorsports LLC, Black Creek Capital Corporation, and Broadmoor Capital Partners.

Granting the motion, Judge Navarro entered an order in Nevada federal court finding that Tucker was individually responsible for the unlawful conduct as "the evidence abundantly establishes [he] participated in and had authority to control the Lending Defendants" and "at the very least … was recklessly indifferent to the misleading representations of the Lending Defendants."

The court banned the defendants from any aspect of consumer lending and prohibited them from engaging in illegal debt collection practices, from conditioning the extension of credit on preauthorized electronic fund transfers, and from misrepresenting material facts about any good or service.

She also entered a $1.3 billion record-setting financial judgment which represents the difference between what borrowers were told they would have to pay on their loans and what they actually paid, and is the largest litigated judgment ever obtained by the FTC.

To read the complaint and summary judgment order in FTC v. AMG Services, click here.

Why it matters: Even before the court's latest ruling, the agency touted its recovery in the action, which resulted in an estimated $353 million in waived debt and $25.5 million in judgments against the defendants in January alone. With the additional $1.3 billion judgment, the agency can now claim its largest litigated judgment ever. "This significant court judgment demonstrates the FTC's determination to crack down on deceptive payday lenders and the people who run them," FTC Chairwoman Edith Ramirez said. "No consumer should be victimized by an unlawful scheme like this one, and it is especially detestable when those who can least afford to be charged undisclosed and inflated fees are the ones being targeted."