Early winter casts a dark blue-gray tint over the aerial shot of a suburban estate, barren trees, but not yet any snow covering the golf course in the distance. The camera zooms in to show men in collared shirts and leather coats bustling in and out of the stark white angular mansion, the cold sky reflected in its floor-to-ceiling windows. Ignoring the men as they remove lavish sports cars from the home, a man inside exercises in his glass-walled home gym. The camera takes care to capture the sweat dripping along his skin before cutting to a fretful woman watching the proceedings through the windows. So it is that Episode 2 of Netflix’s “Dirty Money” documentary series introduces its starring characters: Scott Tucker, the man at the head of an illegal $3.5 billion payday lending enterprise, and his wife, Kim. 

The hour-long episode details the saga of the downfall of Tucker’s Kansas-based lending scheme from multiple perspectives, including his accomplices, family friends, and business partners, the journalists and attorneys who uncovered and prosecuted the case, and those among the masses of people his businesses took advantage of. Interspersing this tale are numerous clips showcasing Tucker’s auto racing. At times, the racing clips are framed as a moment to step back from the tense and occasionally distraught narrative, but other times they serve as an unflinching reminder of the excessive wealth and luxurious lifestyle Tucker enjoyed while he and his associates lament the indignity of the possible sentencing they faced. 

Though the episode is slow to reveal the story, the full scope of the payday lending business’s devastation is horrifying, a Gilded Era dystopian Mafia tale transplanted into the modern day. Tucker made at least $400 million from this payday loan business, all money from loans issued to 4.5 million Americans. The documentary showcases a few recorded phone calls exemplifying the human experiences of those masses. As snippets of conversations with lending phone operators play out over the course of the episode, their dismay casts a bleak image of the situations facing the millions of other exploited customers. 

In one, an operator says, “Okay, I see that you have a due date on November 9th. Minimum amount due is $155, total is $455. How can I assist you today?” To which the consumer replies, “There have been at least four or five payments made on this account. I’m trying to figure out why the balance is $455.” In another, a consumer complains, “You guys are not notifying me, you’re just taking all this money out, and when you could have easily paid off my loan a long time ago!” The operator responds: “You agreed to us debiting the service charge fee.” The consumer’s distress colors their response. “This is ridiculous,” they say. “You guys are just out for money, and I got to make my car payment, and now I can’t because of you guys.” A third short exchange begins with an operator telling a consumer, “Each time the loan is not paid in full, you incur a new service charge.” The consumer answers, “That was not explained to me.”

A dozen more conversations following this pattern are sampled and scattered throughout the episode, each following a consumer baffled by an unexpectedly large charge to their account just as they thought they were finished paying the loan, only to be told they had only just begun to pay off the full amount they owed to the lenders. Christopher Peterson, a professor of law at the University of Utah, explained that Scott Tucker was charging two or three times the interest rates that the New York City Mafia loan sharking syndicates charged. Tucker’s interest rates ranged up to 1,000% on loans, rates far beyond the legal limit where his companies were lending. 

In addition to exorbitant interest rates, Tucker’s payday operations couched the reality of their loans in deliberately confusing language. Payday loans are supposed to be paid in full at the consumer’s next payday, and if they are not paid in full, the lender often charges a service fee to roll the loan over to the next payday — but that service fee does not go toward paying off the loan. By making it seem as though that service fee was going toward their loan, Tucker’s payday lending companies fooled customers into thinking they were going to pay much less than they would end up paying — until the fourth week of payment took out a sum much larger than the consumer was expecting remained to be paid. 

Consumers weren’t caught off guard because of some failure of due diligence, either. “The loan documents were actually deceptive,” said Ioana Gorecki, an attorney with the Federal Trade Commission. “We asked some consumers to send us their loan documents to see what they said, and it became very clear to us, just from a very brief reading of the document, that a reasonable consumer would have absolutely no idea how this loan worked. […] A reasonable consumer wouldn’t understand this language.”

While some consumer protections designed to avoid such predatory rates were in place, these protections were largely codified in state laws. To circumvent them, Tucker formed, in the words of the statement from the Department of Justice, “sham relationships with Native American tribes” to take advantage of their sovereign status. David Heath, a journalist featured in the documentary, described Tucker’s enterprise as “a shell company within a shell company within a tribe.” By making the companies look as though they were owned by tribes, Tucker not only circumvented the law; he redirected the anger of customers who realized they had been taken advantage of onto Native Americans. 

Everyone who worked for Tucker’s payday lending operation was trained, reportedly from day one, to pretend to be working from tribal land in Oklahoma. As consumers learned this, their new anger for the Native American tribes they thought  was responsible for their unfair debt showed through in the phone call snippets and the stories told in the documentary. One such story came from Chief Bill Follis of the Modoc Tribe of Oklahoma, a tribal leader Tucker approached to pitch his sham business. After receiving a phone call from an angry victim of the payday loans, Follis said he learned she’d gotten his phone number by asking the police department who the Chief of the Modocs was. “I didn’t like it very well,” Follis said, “and I told Scott about it.”

Despite the apparent cooperation of the tribes in Tucker’s businesses, those appearances were deceiving. Gorecki explained the nature of the tribes’ involvement in more detail. “[Tucker’s business] tried very hard to make it look like they were a tribally-run business. Really, nothing was happening on tribal land.” Not only were the tribes not operating the business, they barely received any of the profits. “In fact, the tribes were deriving only 1% of gross collected revenue from these companies. 99% of those revenues were going to Scott Tucker and his companies. The tribal accounts were practically his piggy bank,” said Gorecki. To be clear: Scott Tucker took advantage of tribal sovereignty to set up a business that circumvented the law, shifted the apparent ownership onto Native Americans to make them the scapegoat for the ire of his exploited customers, and took 99% of the revenue for himself. 

Just as the phone calls between consumers and operators displayed a clear pattern of confusion, the type of consumer targeted by these loans revealed a clear pattern of exploitation. “A lot of the consumer victims we talked to were struggling individuals,” Gorecki said, describing the process of uncovering the evidence against Tucker. “They were living, usually, paycheck to paycheck, and a lot of times, in between paychecks, they would find themselves short maybe $200, $300. And so many of them would go online and they would search for a payday loan.” 

The application process was deceptively simple. Consumers had no idea that they were likely going to eventually pay back more than five times what they thought they owed. “It’s hard to read through so many complaints and listen to so many consumer calls and not be moved by the misery and the hardship that these companies imposed on consumers,” Gorecki said.

Even as the documentary outlines the extent of the damage Tucker’s business did to millions of Americans, he and his associates remained unsympathetic, speaking only of how unfair or disproportionate he thought the consequences he was facing were. “All of this hubbub over some short-term loans over the internet?” Tucker said. “Really? Really?” His attorney, Timothy Muir, didn’t hesitate to downplay the obfuscating service charge tactics Tucker’s businesses used. “That was an industry-standard model used by over a hundred different lenders,” Muir said. 

Muir was speaking the truth. This type of loan, where service charges are taken out of a paycheck for four paychecks without contributing a single cent toward paying off the cost of the loan, is a widespread and lucrative model for lenders still in operation in the United States. “Just the online part of payday lending was like a 10-billion-dollar-a-year business,” Heath said. 

Just one month before this episode of “Dirty Money” aired, Tucker’s sentencing was announced at 16 years in prison. Muir, his co-defendant, was given seven years in prison. According to the statement: “Acting Deputy U.S. Attorney Joan Loughnane said:  ‘For more than 15 years, Scott Tucker and Timothy Muir made billions of dollars exploiting struggling, everyday Americans through payday loans carrying interest rates as high as 1,000%.  And to hide their criminal scheme, they tried to claim their business was owned and operated by Native American tribes.  But now Tucker and Muir’s predatory business is closed and they have been sentenced to significant time in prison for their deceptive practices.’”

Although Tucker and Muir are facing the consequences, their business laid the groundwork for a new era of insidious payday loans — with the epicenter in Kansas City. Thanks to a stark lack of regulations in Kansas, multimillion dollar companies continue to make fortunes off of vulnerable people without running afoul of the law using similar payment models. As Heath explained, “There’s a whole industry built around poor people.” Until consumer protections are put in place, more payday loan empires will rise on the backs of those with nowhere else to turn to make ends meet.

Four states – Ohio, Colorado, Hawaii, and Virginia – have already passed comprehensive payday loan reform. Kansas hopes to be next, with residents from all walks of life pushing for reform that maintains access to credit but better protects current and future borrowers. 

Payday loans are unregulated in Kansas, allowing lenders to charge exorbitant fees and leading to an average APR of 391%. Because these loans must be paid in full on the following payday, many borrowers are forced to take out a second loan, trapping them in a cycle of debt.

Predatory payday loans, such as those supporting Tucker’s luxury cars and $3.5 billion enterprise, take advantage of poor and vulnerable people simply trying to keep their lights on and food on the table. Many Kansas lenders are based in other states, drawing profits away from the neighborhoods they claim to be supporting, rather than investing in them.

Access to emergency cash is a vital need for the 175,000 Kansans who use payday loans annually. In the push for reform, it is imperative for those affected to share their stories and draw attention to the need for responsible, realistic lending regulations that protect borrowers while maintaining access to emergency funds. 

The Kansans for Payday Loan Reform Coalition has organized a grassroots movement pushing for three major changes: a cap on interest rates; regulation that allows for payment installments, rather than requiring lump sum payments; and a limited repayment amount.

Join the Coalition in the fight for reform by:

  • Raising awareness about the cycle of debt unregulated payday loans cause for vulnerable borrowers.
  • Contacting your state representative and encourage them to take timely action on this issue.
  • Attending the Coalition’s “Day at the Capitol” to End Predatory Lending event on January 25, 2023 at 12 p.m., at the State Capitol, 300 W. 10th Street, in Topeka, Kansas.

Learn more about the need for payday loan reform in Kansas.