OneMain Financial Sued by 13 States Over Alleged Deceptive Practices
A bipartisan coalition of thirteen state attorneys general has filed a lawsuit against OneMain Financial, alleging the lender tricked borrowers into purchasing unnecessary and costly add-on products, inflating the total cost of their loans. The lawsuit, filed on March 16, 2026, claims OneMain engaged in deceptive practices that disproportionately harmed financially vulnerable consumers.
Allegations Against OneMain Financial
The attorneys general allege that OneMain employees steered borrowers toward purchasing credit insurance and other loan-related products, often misrepresenting their necessity and cancellation policies. These products, including credit insurance (covering loan payments in case of death or unemployment) and membership services similar to AAA, are owned by OneMain through a related company, increasing the overall cost of borrowing. The lawsuit further contends that OneMain failed to inform consumers they may already possess similar coverage through existing memberships.
States Involved in the Lawsuit
The lawsuit was led by New York Attorney General Letitia James and includes attorneys general from Colorado, Maryland, Nevada, New Hampshire, New Jersey, North Dakota, Oklahoma, Pennsylvania, South Dakota, Virginia, Washington, and Wisconsin .
Seeking Restitution and Penalties
The plaintiffs are seeking court orders to halt OneMain’s alleged misleading practices and to secure restitution for affected consumers. They also aim to collect penalties, recover unlawful profits, and compel OneMain to remove negative credit reporting information resulting from these practices .
OneMain’s Response
OneMain Financial has stated that the lawsuit is “meritless” and intends to “vigorously litigate” the claims. The company maintains it operates honestly and transparently, providing responsible access to credit for hardworking Americans. OneMain also asserts that the allegations attempt to revisit issues previously reviewed and resolved with the Consumer Financial Protection Bureau (CFPB) .
Previous CFPB Settlement
In May 2023, OneMain reached a settlement with the CFPB, agreeing to pay $20 million in redress and penalties to resolve allegations of deceptive sales practices . At the time, OneMain stated it was “pleased to resolve this matter” related to refunding practices for optional products, while still maintaining its disagreement with the CFPB’s conclusions.
Washington State’s Perspective
Attorney General Nick Brown of Washington state highlighted that OneMain has sold over $100 million in add-on products and issued more than 200,000 loans to Washington residents since 2019. He accused OneMain of luring customers with promises of straightforward credit terms, only to burden them with unexpected debt .