MADISON, Wis. (WFRV) – Josh Kaul and 12 other state attorneys general have filed a lawsuit against OneMain Financial, Inc. and related entities, alleging the installment lender charged consumers hundreds of millions of dollars in hidden fees and interest nationwide.
According to the complaint, OneMain operates 27 branches in Wisconsin and advertises high-cost installment loans with “clear, upfront terms,” but allegedly adds hidden insurance policies and other add-on products that significantly increase the total cost of the loans.
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The lawsuit claims consumers are rushed through dense loan documents containing terms and conditions for add-on products, sometimes without adequate time to review them. It further alleges that OneMain often hides or misrepresents these add-ons and, in some cases, charges consumers for products they declined.
“Folks shouldn’t end up paying more due to add-ons they weren’t intending to purchase,” Kaul said in a statement. “Consumers should have a clear understanding of what they’re purchasing.”
The complaint alleges OneMain does not advertise that it sells add-on products and maintains written policies against unlawful add-on packing that differ from its actual practices. The lawsuit also claims employees face financial pressure to sell add-ons and that loan closings are often conducted in ways that limit consumers’ ability to review documents, including on smartphones where fine print may be difficult to read.
Additionally, the suit alleges OneMain misleads consumers when refinancing loans by adding new add-on products and obscuring key terms.
The coalition is seeking restitution for affected consumers, civil penalties and the release of profits allegedly obtained unlawfully. The lawsuit also seeks a court order barring the company from continuing the alleged practices and requiring it to withdraw negative credit information tied to the add-on products.
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Consumers who believe they may have been affected are encouraged to file a complaint with the Wisconsin Department of Financial Institutions.
Joining Wisconsin in the lawsuit are the attorneys general of Colorado, Maryland, Nevada, New Hampshire, New Jersey, New York, North Dakota, Oklahoma, Pennsylvania, South Dakota, Virginia and Washington.
