OneMain Sued for Debt Trap Scheme in NY

New York – A shocking lawsuit against OneMain Financial (OneMain) has been filed by New York Attorney General Letitia James and a bipartisan coalition of 12 other attorneys general. The group is targeting the predatory lender for its scheme to trap consumers in debt through expensive, often useless add-ons to loans.

Attorney General James and the coalition accuse OneMain of exploiting vulnerable borrowers by covertly adding costly insurance policies and membership clubs to high-interest loans. These add-ons are tucked away in complex loan agreements and pushed on customers without adequate disclosure or consent, leaving them with unexpected fees and higher debt loads.

The deceptive tactics have ensnared tens of thousands of New Yorkers, leading to a vicious cycle of refinancing and accumulating more expensive loan packages. OneMain’s practices include misleading borrowers about the actual costs of add-ons until after the loan is closed, often resulting in hundreds or even thousands of dollars in additional charges.

OneMain, one of the nation’s largest non-bank installment lenders, markets itself as a lender to those with poor credit but has been accused of pressuring consumers into accepting these costly add-ons. In some cases, customers are charged for add-ons they have declined or do not understand.

The coalition is seeking court orders to halt OneMain’s misleading and abusive practices and secure restitution for the affected consumers. Attorney General James emphasizes that OneMain targets struggling individuals with hidden fees and deceptive lending tactics, driving up costs for families across New York and the country.

This lawsuit aims to stop OneMain’s illegal business model and restore funds to New Yorkers who have been cheated by these predatory practices.

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