13 states sue OneMain Financial deceiving borrowers with loan add-ons

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 purchasing unwanted high-priced insurance products without full disclosure. New York Attorney General Letitia James leads the lawsuit along with 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 nonbank 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.

According to PBS News, OneMain 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. The lawsuit alleges the company adds additional products, which include credit life insurance, credit disability insurance, credit involuntary unemployment insurance, guaranteed asset protection insurance, term life insurance, roadside assistance plans, home and auto plus plans, and silver safeguard membership plans, to initial loan balances without borrowers understanding what they are buying or how much it will cost them.

The costs of the additional loan products can be substantial. According to the lawsuit, a borrower refinanced a $2,770 loan balance and received $2,730 in new cash. OneMain allegedly added $1,674 in add-on insurance premiums to that loan. Those premiums then generated $1,170 in additional interest.

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 asked the 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 over related allegations, agreeing to pay $20 million in consumer refunds and civil penalties. The consent order required the company 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.