New York Attorney General Letitia James announced on Mar. 16 that she is leading a bipartisan group of 12 other attorneys general in a lawsuit against OneMain Financial, alleging the company misled customers and trapped borrowers in costly loans with hidden fees.
The lawsuit claims that OneMain, one of the largest non-bank installment lenders in the United States, targeted financially vulnerable consumers by adding expensive and often unnecessary products to their loans without proper disclosure or consent. The coalition seeks court orders to halt these practices and secure restitution for affected consumers.
“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 James. “These predatory tactics are driving up costs for working families across New York and the country. Today I am taking action to stop OneMain’s illegal and abusive business model and get New Yorkers their money back.”
According to the complaint, OneMain added credit insurance policies and membership clubs to loans without clear consumer approval, sometimes charging customers for add-ons they declined. The terms were often buried in paperwork or not fully explained until after loan closure, resulting in unexpected costs that could exceed the amount borrowed. Borrowers who refinanced were frequently subjected to additional undisclosed charges.
The attorneys general allege violations of state and federal consumer protection laws, including false advertising and unfair business practices. They are seeking penalties, disgorgement of profits, removal of negative credit information related to these products, and an end to legal actions against affected customers.
Letitia James heads the New York Attorney General’s office according to the official website. The office promotes social justice through civil rights enforcement and consumer advocacy according to its official website, protects New Yorkers by upholding public safety and defending civil rights according to its official website, operates regional offices statewide according to its official website, provides services such as fraud investigations and tenant dispute mediation according to its official website, and functions as a public law enforcement agency for New York according to its official website.
Joining James in this legal action are attorneys general from Colorado, Maryland, Nevada, New Hampshire, New Jersey, North Dakota, Oklahoma, Pennsylvania, South Dakota, Virginia, Washington, and Wisconsin.
