Thirteen States Sue OneMain Financial Over Loan Add-Ons, Seeking These Benefits for Borrowers

Thirteen states filed a federal lawsuit against OneMain Financial on March 16, 2026, accusing the financial company of deceiving borrowers into paying hidden loan fees and for unwanted high-priced insurance products, without full disclosure. The lawsuit is led by New York Attorney General Letitia James and joined by attorneys general from Pennsylvania, Colorado, Maryland, Nevada, New Hampshire, New Jersey, North Dakota, Oklahoma, South Dakota, Virginia, Washington and Wisconsin.

OneMain Financial is one of the largest non-bank consumer lenders in the United States, specializing in subprime installment loans for borrowers who often carry lower credit scores. The company operates more than 1,300 branches across 44 states.

According to the complaint, OneMain spent years tricking consumers into paying for products they did not want or understand, and often never agreed to purchase.

OneMain pushed back on the allegations. According to PBS News, the company said the states' claims are "simply untrue" and declared it would "litigate this case vigorously."

How the alleged predatory lending scheme works

The plaintiffs claim OneMain operates an "add-on packing" scheme. Additional products, which include credit life insurance, credit disability insurance, credit involuntary unemployment insurance, Guaranteed Asset Protection (GAP), term life insurance, "Auto Plus" roadside assistance plans, "Home and Auto Plus" plans and "Silver Safeguard" membership plans are added to initial loan balances without borrowers understanding what they are buying or how much it will ultimately cost them.

The costs of the additional loan products are substantial. According to the lawsuit, a borrower refinanced a $2,770 loan balance and received $2,730 in new cash. OneMain added $1,674 in add-on insurance premiums to that loan.

Those premiums then generated $1,170 in additional interest. According to the borrower interviewed, the only reference to add-on insurance on the company's website was buried in text found on page six of eight pages on a desktop computer, and was a link to an entirely new website.

According to the allegations, add-on products are only offered during the closing process after the borrower is committed to the loan. Consumers claimed the closing process often involved reviewing 18 pages of documents containing more than 15,000 in as little as three minutes.

What does the lawsuit seek?

The 20-count complaint brings claims under the Consumer Financial Protection Act for deception, unfairness and abusive practices. It also alleges violations of the Truth in Lending Act and various state consumer protection laws.

The plaintiff states are asking a court to order OneMain to:

  • Permanently stop the alleged practices
  • Pay full restitution to affected consumers
  • Return profits gained from the alleged conduct
  • Pay civil penalties under both federal and state law
  • Withdraw judgments and liens connected to those payments
  • Delete negative credit information linked to the alleged misconduct
  • Cancel or rewrite affected loan contracts
  • Release vehicle liens on secured loans

Has OneMain been involved in other litigation?

In May 2023, OneMain settled with the Consumer Financial Protection Bureau (CFPB) over related allegations, agreeing to pay $20 million in consumer refunds and civil penalties. The consent order stated that OneMain deceived borrowers into thinking they needed to purchase add-on products to receive a loan. The company was required to refund $10 million in interest charges to 25,000 customers who had cancelled their add-on product purchases.

In 2025, OneMain settled a class action lawsuit for $500,000. The plaintiffs in the case claimed the company sent debt collection emails and text messages to Florida customers in violation of the Florida Consumer Collection Practices Act.