OneMain Financial Sued by U.S. State Attorneys General on Allegations of Hidden Add-On Products
By Kelly Cloonan
A group of U.S. state attorneys general sued OneMain Financial, alleging the subprime lender illegally misled customers with hidden add-on products.
The group, led by New York Attorney General Letitia James, said OneMain loads its customers' loans with additional products like insurance policies without their knowledge or by misleading them about the products' terms and costs.
Customers are charged hundreds or thousands of dollars more for their loans than they expect as a result, leading to a cycle where they have to refinance into more expensive loan packages to keep up with payments to OneMain, the attorneys general said. The group said those practices violate state and federal consumer protection laws, including New York's laws against illegal, fraudulent, deceptive, unfair and abusive conduct and false advertising.
The group said it seeks court orders to stop the alleged practices and to collect restitution for consumers who were affected.
"OneMain targets people who are already struggling financially, saddling them with hidden fees and misleading loans to trap them in even more debt," said Attorney General Letitia James said. "These predatory tactics are driving up costs for working families across New York and the country."
OneMain said the allegations are false and the case is an attempt to relitigate issues that were already reviewed by the Consumer Financial Protection Bureau. The company in 2023 agreed to pay $20 million to settle charges from the CFPB that said it pressured employees to sell add-on products and deceived customers about whether they needed to buy those products to receive a loan.
"We operate honestly and transparently, in full compliance with all laws and regulations, as we provide responsible and much needed access to credit for hardworking Americans. This matter does not change how we operate our business or serve our customers," a spokesperson for OneMain said. "We will litigate this case vigorously and look forward to proving the truth in court."
Write to Kelly Cloonan at kelly.cloonan@wsj.com
(END) Dow Jones Newswires
March 16, 2026 14:06 ET (18:06 GMT)
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