The Federal Trade Commission (FTC) has filed a lawsuit against a group payday loan lenders that have allegedly placed undisclosed fees on their short-term loans. In addition to the hidden fees, the FTC said these lenders also threatened borrowers with jail time and lawsuits when trying to collect money.

The payday lenders in question are all associated with various Native American tribes, and have responded by claiming immunity since they are affiliated with sovereign tribes, and thus cannot be held responsible to United States law.

However, the FTC claims that tribal affiliation does “not exempt them from complying with federal law.”

According to the FTC, the payday loan lenders have generated more than 7,500 complaints from customers over to law enforcement agencies over the last five years. Many of these complaints reported being charges fees that created debt of over three times the principal on the payday loans originated.

Eric Barboza, one of the victims of these lenders, said he took out a short-term loan for $500. He agreed to what he thought was a $150 fee for the loan, but the payday lender he worked with attempted to charge him $1,925. When Barboza refused to pay such a usurious amount, the lender threatened him with arrest.

One of the lenders being prosecuted by the FTC is AMG Services, which is associated with the Miami Tribe in Oklahoma. AMG Services is run by Scott Tucker, a race car driver from Nevada, and his brother. Tucker is accused of charging borrowers inflated fees and then diverting the payment he receives from the payday loan lending business to another company he owns called Level 5 Motor Sports.

Tucker laundered that money by claiming it was for “sponsorship” fees that were for Tucker’s racing career.

The FTC urges those looking for payday loans to consider alternatives.