New York Attorney General Letitia James and a coalition of 12 other attorneys general filed a lawsuit against lender OneMain Financial, alleging the company used deceptive tactics that trapped borrowers in costly loans.
The lawsuit claims OneMain misled customers by adding expensive add-on products to loans, increasing costs for tens of thousands of borrowers in New York and across the country.
According to the complaint, OneMain marketed itself as a lender serving consumers with poor credit while loading loans with additional products such as credit insurance and membership programs.
Officials allege the company often added these products without customers’ knowledge or misled borrowers about their terms and costs.
In some cases, the lawsuit claims, borrowers were charged for add-ons even after declining them.
The additional products were included in loan balances, meaning borrowers paid interest on the added costs.
The attorneys general say some borrowers ended up paying hundreds or thousands of dollars more than expected, and in some cases paid more for the add-ons than for the money they borrowed.
The lawsuit also alleges borrowers who attempted to refinance their loans were again steered into loan packages that included additional products.
The coalition claims the practices violate state and federal consumer protection laws, including laws prohibiting deceptive and unfair business conduct.
The lawsuit seeks restitution for affected consumers, civil penalties, and a court order preventing OneMain from continuing the alleged practices.
Attorneys general from Colorado, Maryland, Nevada, New Hampshire, New Jersey, North Dakota, Oklahoma, Pennsylvania, South Dakota, Virginia, Washington, and Wisconsin joined New York in the case.
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