Attorney General Jones Sues OneMain Financial for an Alleged Lending Scheme Involving Hidden Add-On Products

Attorney General Jones Sues OneMain Financial for an Alleged Lending Scheme Involving Hidden Add-On Products
13 States Seek Hundreds of Millions of Dollars in Restitution, Penalties, and Ask the Court to End the Unlawful Conduct

Richmond, VA - Attorney General Jay Jones and 12 other state Attorneys General announced a lawsuit against OneMain Financial, Inc. and related entities alleging that the installment lender charged consumers nationwide hundreds of millions of dollars in hidden fees and interest.

The Complaint alleges that, with multiple branches operating throughout Virginia, OneMain offers high-cost installment loans with “clear, upfront terms,” but packs those loans with hidden insurance policies and other add-on products that inflate the cost of the loans by hundreds or thousands of dollars. The Complaint further alleges that OneMain rushes consumers through fine-print loan documents containing dense terms and conditions of the add-ons, and often hides the add-ons, sometimes misrepresents them, or even charges consumers who outright reject them.

“Exploiting Virginians’ by promising quick cash but trapping them with payments for services they did not need, want, or ask for is unacceptable and predatory,” Attorney General Jones said. “My office will always fight back against predatory lenders that take advantage of vulnerable communities for their own financial gain. We will protect vulnerable consumers against bad actors.”

The lawsuit alleges that:

• OneMain does not advertise that it sells add-on products, so consumers who come through its doors have no reason to expect the company will aggressively push these products.
• OneMain has written policies that purport to prevent unlawful add-on packing, but the company’s actual processes operate outside its written policies.
• OneMain puts financial pressure on its employees to pack add-ons.
• OneMain rushes consumers through a loan closing process in which its employees often control the computer screen that shows the loan documents. This tactic does not allow the consumer time to review each page of the loan application as the employee scrolls through the contract.
• OneMain buries the fine print that mentions the add-on products inside 50 pages of legalese, which OneMain prevents consumers from reading before accepting the loan contract.
• OneMain often closes loans on smart phones, where already small print shrinks to an illegible size.
• OneMain also misleads consumers when encouraging them to refinance their loans by tacking on add-on products and by hiding key terms.

With this lawsuit, Attorney General Jones and the coalition are seeking restitution for consumers who were unlawfully charged for these add-on products, penalties for violating state laws, and the release of all unlawful profits. The lawsuit also seeks a court order preventing OneMain from continuing its illegal practices, requiring OneMain to withdraw any negative information reported to credit agencies that may impact its customers’ credit scores, and requiring OneMain to abandon any legal proceedings against customers related to the add-on loan products.

Virginians who believe that they or someone they know may be a victim of the business practices of OneMain should file a complaint with the Office of Attorney General online or by calling 1-800-552-9963.

This lawsuit is being led by the Attorneys General of Pennsylvania and New York. Joining them and Attorney General Jones in this lawsuit are the Attorneys General of Colorado, Maryland, Nevada, New Hampshire, New Jersey, North Dakota, Oklahoma, South Dakota, Washington, and Wisconsin.

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