Thirteen attorneys general have joined together in a lawsuit against OneMain Financial for allegedly adding unwanted products and hidden costs to borrowers’ loans, resulting in hundreds of millions of dollars in hidden charges.
According to the lawsuit filed Monday in New York, the plaintiffs allege that OneMain Financial employed the practice of guiding customers toward purchasing credit insurance and other loan-related products while making misleading claims about what was actually required, as well as what the cancellation process was.
The attorneys general argued in their complaint doing so violated state consumer protection laws and impacted tens of thousands of borrowers.
“OneMain targets people who are already struggling financially, saddling them with hidden fees and misleading loans to trap them in even more debt,” New York State Attorney General Letitia James said in a statement announcing the suit.
Maine is not among the coalition of states to have signed onto the lawsuit, although OneMain Financial does operate a location in Scarborough. New Hampshire, however, has signed onto the case. There are currently five OneMain locations operating in the state.
New Hampshire Attorney General John Formella said in a statement that OneMain “marketed installment loans to [residents] seeking financial relief, then increased the cost of those loans through add-on products that consumers did not clearly request or knowingly agree to.”
“New Hampshire families trying to make ends meet deserve straightforward terms, not hidden costs,” he added. “Companies that fail to provide transparency and fair dealing, as required by our consumer protection laws, should expect our office to take action to ensure a fair and honest marketplace.”
OneMain has responded to the lawsuit, explaining that the practices in question were already the subject of a 2023 review by the Consumer Financial Protection Bureau (CFPB).
As part of a settlement, OneMain agreed to pay $10 million in fines and penalties for allegedly selling add-on products to consumers.
“The states’ allegations are simply untrue — their case is wrong on the facts and wrong on the law and attempts to re-litigate issues that were already reviewed by the Consumer Financial Protection Bureau and fully resolved,” OneMain said in a statement shared by the Associated Press. “We will litigate this case vigorously and look forward to proving the truth in court.”
Also participating in this lawsuit are the attorneys general of Colorado, Nevada, Maryland, North Dakota, Oklahoma, Washington, Wisconsin, New Jersey, and South Dakota, as well as of the Commonwealths of Virginia and Pennsylvania.
