13 attorneys general sue OneMain over hidden loan add-ons

March 16, 2026

A bipartisan group of 13 attorneys general sued the financial company OneMain Financial on Monday, alleging the company placed additional products and other hidden costs on its loans that led to higher costs for borrowers.

The lawsuit, filed in New York on Monday, says OneMain employees steered borrowers into purchasing credit insurance and other loan-related products while making false claims about whether the products were required and how they could be canceled. The attorneys general say the conduct affected tens of thousands of borrowers and violated state consumer protection laws.

OneMain said the practices involved with the lawsuit were already reviewed with the Consumer Financial Protection Bureau in 2023. In that settlement, OneMain agreed to repay $10 million to consumers and pay $10 million in fines and penalties for allegedly selling add-on products to consumers.

“The states’ allegations are simply untrue -- their case is wrong on the facts and wrong on the law and attempts to re-litigate issues that were already reviewed by the Consumer Financial Protection Bureau and fully resolved. We will litigate this case vigorously and look forward to proving the truth in court.”

The products include credit insurance, which claims to pay the loan if a consumer dies or becomes unemployed, as well as products like home and auto memberships that are similar to AAA. These companies are, in turn, owned by OneMain through a related company.

These products increase the cost of the loan. The lawsuit alleges that OneMain does not check whether the consumer may already have a home or auto membership service through AAA as well.

“OneMain targets people who are already struggling financially, saddling them with hidden fees and misleading loans to trap them in even more debt,” New York State Attorney General Letitia James said in a statement.

OneMain, based in Evansville, Indiana, is one of the largest U.S. non-bank installment lenders. It primarily offers loans to those with subprime credit scores, meaning much of its customers are already financially struggling when they come to OneMain.

Along with New York, the other Attorneys General joining the lawsuit include the states of Colorado, Nevada, Maryland, North Dakota, Oklahoma, Washington, Wisconsin, New Jersey, South Dakota, and New Hampshire as well as the Commonwealths of Virginia and Pennsylvania.