The Federal Trade Commission announced its largest-ever payday lending settlement on Friday, as two companies agreed to pay $21 million and waive another $285 million in charges that were never collected from customers.

The agreement marks a key point in a long-running legal battle between the FTC and firms connected to the Miami Tribe of Oklahoma and Scott A. Tucker, a Kansas man who has reportedly used payday lending profits to bankroll his own race-car driving career.

In the lawsuit, the FTC alleged that the firms, AMG Services Inc., and MNE Services Inc., misrepresented how much loans would cost consumers — for example, charging $975 when the contract stated that the loan would cost $300 to repay. The FTC contends that deceptive loan documents were used in connection with at least five million loans.

"It should be self-evident that payday lenders may not describe their loans as having a certain cost and then turn around and charge consumers substantially more," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a news release.

The proposed settlement, which has yet to be approved by a federal judge, follows a May 2014 court ruling that found the loan agreements were indeed deceptive.

MNE Services lent to consumers under the names Ameriloan, United Cash Loans, US Fast Cash, Advantage Cash Services and Star Cash Processing, the FTC said. Websites for each of those names remained active Friday.

The loans were serviced by AMG Services, according to the FTC.

Going forward, the settlement agreement bars the defendants from misrepresenting the terms of their loans. The $21 million payment is to be used to compensate borrowers who were harmed, though the FTC did not say how many consumers will receive a payment, or how much money affected consumers will receive.

Emilee Truelove, a spokeswoman for the Miami Tribe of Oklahoma, declined to comment on the settlement. Bradley Weidenhammer, a lawyer for both AMG Services and MNE Services, did not immediately respond to messages seeking comment.

Several other corporate entities that were named as defendants by the FTC remain in litigation with the agency.

Two payday lending trade groups — the Community Financial Services Association of America and the Online Lenders Alliance — distanced themselves Friday from AMG Services and MNE Services, saying that the two companies are not members of their organizations.

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