13 State Attorneys General Sue OneMain Over Alleged Hidden Loan Add‑Ons

A bipartisan coalition of 13 state attorneys general filed suit Monday in New York against OneMain Financial, one of the country’s largest non‑bank installment lenders, alleging it pushed unwanted credit insurance and other add‑on products onto borrowers through deceptive tactics that violated state consumer‑protection laws. The complaint says OneMain employees steered largely subprime borrowers into buying credit insurance and home and auto membership plans by misleading them about whether the extras were required and how they could cancel, inflating loan costs for tens of thousands of customers. The suit notes that some of the add‑on services are owned by a related OneMain company and that the lender allegedly failed to check whether borrowers already had similar coverage, for example through AAA. New York Attorney General Letitia James accused OneMain of targeting people “already struggling financially” and trapping them in more debt, while the company rejected the allegations as “simply untrue” and argued that the states are trying to relitigate conduct it already settled with the Consumer Financial Protection Bureau in 2023 for $20 million in restitution and penalties. The case underscores growing state‑level scrutiny of high‑cost lenders and so‑called junk fees in consumer finance, particularly products pitched to borrowers with poor credit scores.