13 Attorneys General Sue OneMain Over Add-On Practices

A coalition of 13 attorneys general from across the United States filed a lawsuit against OneMain Financial on Monday, accusing the installment lender of misleading subprime borrowers into purchasing costly add-on products that inflated their loan expenses. The complaint, lodged in federal court in New York, claims the practices violated state consumer protection laws and affected tens of thousands of customers.

The attorneys general, led by New York Attorney General Letitia James, allege that OneMain employees routinely steered borrowers toward optional products such as credit insurance and home and auto membership services, similar to those offered by AAA. These add-ons, provided through affiliates owned by OneMain, are financed into the loan upfront, adding hundreds or thousands of dollars in interest over time. According to the suit, staff made deceptive statements about whether the products were mandatory and obscured cancellation options, while focusing discussions on monthly payments rather than total costs. The complaint further states that employees received commissions for selling these items and were instructed to persist in offering them until customers explicitly...