Trump’s FTC Confirms Lawyer for Notorious Payday Con Man to Lead Its Consumer Protection Division

May 17, 2018

Andrew Smith Previously Represented a Payday Lender/Race Car Driver Who the FTC Obtained a $1.3 Billion Judgment Against for Deceiving Consumers – The Lender Was Also Sentenced to 16 Years in Prison

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WASHINGTON, D.C. – Today, consumer watchdog organization Allied Progress criticized the Federal Trade Commission (FTC) for confirming Andrew M. Smith – an attorney for the likes of Equifax and a notorious payday lender the FTC obtained a $1.3 billion judgement against for deceiving consumers – as director of its Bureau of Consumer Protection. Because of Mr. Smith’s vast client list, which he has refused to make public, he must recuse himself from much of the important consumer protection work he should be doing in his new post.

“Andrew Smith has defended the worst of the worst when he could have been standing up for consumers — Equifax and credit reporting agencies in the wake of one of the worst personal data breaches in history, payday lenders that trap people in cycles of debt, you name it,” said Karl Frisch, executive director of Allied Progress.

He continued, “Smith fought the FTC when it obtained a judgement against a notorious predatory lender $1.3 billion for deceiving consumers. That lender was sentenced to 16 years in prison and Smith is now in charge of protecting consumers at the FTC. It’s beyond swampy.”

“I’m tempted to say this is a ‘fox in the henhouse’ situation but it’s actually more like the FTC has given the fox keys to the henhouse and asked him to protect the hens — they know he won’t and they don’t care,” he concluded.

WHAT YOU NEED TO NOW

• Smith Represented a Notorious Payday Lending Con Man Who Was Sentenced to 16 Years in Prison for Deceiving Consumers – The FTC Also Obtained a $1.3 Billion Judgement Against the Lender. In 2012, Smith defended AMG Services – a company controlled by infamous payday lender Scott Tucker – in a case against the Federal Trade Commission. AMG Services and related entities were ultimately hit with “the largest litigated judgment ever obtained by the FTC” – $1.3 billion – for deceiving consumers when providing and collecting on payday loans.” [FTC v. AMG Servs., 2012 U.S. Dist. LEXIS 116058; Exercises in the Presentation of Diplomas (May 15, 1994), College of William and Mary Law School, 05/15/94; “FTC Charges Payday Lending Scheme with Piling Inflated Fees on Borrowers and Making Unlawful Threats when Collecting,” Federal Trade Commission, 04/02/12; “U.S. Court Finds in FTC’s Favor and Imposes Record $1.3 Billion Judgment Against Defendants Behind AMG Payday Lending Scheme,” Federal Trade Commission, 10/04/16; Brendan Pierson, “Race car driver Scott Tucker found guilty in U.S. payday lending case,” Reuters, 10/13/17.]

• Smith Represented a Trade Group for Shady Online Payday Lenders. Smith has represented “consumer credit reporting firms and online lenders,” including the Online Lenders Alliance, a “trade group for online payday lenders.” [Evan Weinberger, “FTC to Tap Covington’s Smith to Lead Consumer Protection Unit,” Bloomberg, 04/18/18; James Rufus Koren, “Trade group promises stricter scrutiny of payday loan ads,” Los Angeles Times, 07/15/16.]

• Smith Encouraged Congress to Allow Unrestricted Payday Lending Nationally. In January 2018, Smith testified before the House Subcommittee on Financial Institutions and Consumer Credit in support of legislation that would “authorize unrestricted payday lending nationally.” [Statement of Andrew M. Smith, House Subcommittee on Financial Institutions and Consumer Credit, 01/30/18; Hearing of the House Financial Services Committee, Financial Institutions and Consumer Credit Subcommittee on Opportunities and Challenges in the Fintech Marketplace, 01/30/18; H.R.4439 – Modernizing Credit Opportunities Act, 115^th Congress, 11/16/17; Andrew Smith, “Giving the middle class credit: New bill a step in right direction,” The Hill, 02/24/18.]

• After the Equifax Data Breach, Smith Testified in Congress, Attempting to Convince Senators the Industry Could Police Itself. After the Equifax data breach, Smith testified before the Senate Banking Committee on behalf of the Consumer Data Industry Association, an industry trade group whose members include Equifax, Experian and TransUnion. At the hearing, Smith “attempted to sway senators that the industry could police itself.” [Hearing of the Senate Committee on Banking, Housing, and Urban Affairs on Consumer Data, 10/17/17; About CDIA, Consumer Data Industry Association, accessed 05/15/18; “Senators Open to More Oversight of Credit Reporting Industry,” Congressional Quarterly News, 10/17/17.]

• Smith Argued that Equifax and other Credit Bureaus Should Be Allowed to Ask Customers to Waive Their Rights Under the Fair Credit Reporting Act. In July 2017, Smith filed an amicus brief on behalf of the Consumer Data Industry Association, which represents the largest credit bureaus, including Equifax. Smith argued that, because the industry is subject to so many class action lawsuits, it should be allowed to ask customers to waive their rights under the Fair Credit Reporting Act. The brief was filed just months before Equifax was subject to numerous class-actions in the wake of its data breach which affected over 140 million Americans. The FTC has some enforcement authority under the FCRA. [MOTION FOR LEAVE TO FILE AND BRIEF OF THE CONSUMER DATA INDUSTRY ASSOCIATION AS AMICUS CURIAE IN SUPPORT OF PETITIONER, M-I, LLC, v. Sarmad Syed, Supreme Court of the United States, July 2017; Kevin McGowan, “No Waiver Allowed in Background Check Disclosure Form,” Bloomberg, 01/24/17; “40 Years of Experience with the Fair Credit Reporting Act,” Federal Trade Commission, July 2011; MOTION FOR LEAVE TO FILE AND BRIEF OF THE CONSUMER DATA INDUSTRY ASSOCIATION AS AMICUS CURIAE IN SUPPORT OF PETITIONER, M-I, LLC, v. Sarmad Syed, Supreme Court of the United States, July 2017; “Statement of Francis Creighton,” U.S. House Subcommittee on Financial Institutions & Consumer Credit, Committee on Financial Services, 03/07/18; Kevin McGowan, “No Waiver Allowed in Background Check Disclosure Form,” Bloomberg, 01/24/17; Kenneth R. Harney, “Data breach at Equifax prompts a national class-action suit,” The Washington Post, 11/22/17; Alyssa Newcomb, “Massive Equifax Data Breach Could Affect Half of the U.S. Population,” NBC News, 09/07/17]

• Smith Represented Uber When the FTC Alleged the Company Misled Drivers About Potential Earnings. Smith represented Uber Technologies when the Federal Trade Commission alleged that the company “misled prospective drivers with exaggerated earning claims and claims about financing through its Vehicle Solutions Program.” Uber agreed to pay $20 million to settle the case in January 2017. [Kate Conger, “In Letter, Uber Said Drivers Didn’t Make Advertised Earnings Due to Their ‘Choices,’” Gizmodo, 12/21/17; Complaint, Federal Trade Commission v. Uber Technologies, Case No. 3:17-cv-00261, 01/19/17; “Uber Agrees to Pay $20 Million to Settle FTC Charges That It Recruited Prospective Drivers with Exaggerated Earnings Claims,”  Federal Trade Commission, 01/19/17]

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