OneMain Sued by US States for Alleged Deceptive Lending Practices

Subprime lender accused of adding hidden fees and products to loans

Mar. 16, 2026 at 6:34pm

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Twelve U.S. state attorneys general have filed a lawsuit against OneMain Financial, accusing the subprime lender of tacking on hidden add-on products to loans in order to extract hundreds of millions of dollars in junk fees from consumers. The lawsuit alleges that OneMain deceived borrowers about the need to purchase these add-on products and failed to refund interest to borrowers who canceled the add-ons.

Why it matters

This lawsuit highlights ongoing concerns about deceptive lending practices in the subprime lending industry, which often targets consumers with limited access to credit. The allegations against OneMain echo previous charges brought by the Consumer Financial Protection Bureau, raising questions about the company's compliance with consumer protection laws.

The details

According to the lawsuit, OneMain allegedly pressured its employees to sell add-on products to borrowers in order to meet sales targets, even if the borrowers did not need or want the products. The company is also accused of failing to properly refund interest to borrowers who canceled the add-on products they had purchased.

  • The lawsuit was filed on Monday, March 16, 2026.
  • In May 2023, OneMain agreed to pay $20 million to settle CFPB charges related to its sales of add-on products.

The players

OneMain Financial

A subprime lender based in Evansville, Indiana that provides loans to consumers who may have limited access to credit.

Jennifer Davenport

The New Jersey Attorney General who announced the lawsuit against OneMain.

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What they’re saying

“We operate honestly and transparently, in full compliance with all laws and regulations, as we provide responsible and much needed access to credit for hardworking Americans. We will litigate this case vigorously and look forward to proving the truth in court.”

— OneMain Financial

What’s next

The lawsuit is ongoing, and the court will need to determine the validity of the states' allegations against OneMain.

The takeaway

This case highlights the ongoing challenges in regulating the subprime lending industry and ensuring that lenders are not taking advantage of vulnerable consumers through deceptive practices. It underscores the importance of robust consumer protection laws and enforcement to prevent such abuses.