NJ Sues OneMain Financial for Hidden Junk Fees in Add-On Loan Products

Press Release

| For Immediate Release: March 16, 2026 Office of the Attorney General Jennifer Davenport, Acting Attorney General Division of Consumer Affairs Jeremy E. Hollander, Acting Director Division of Law Michael C, Walters, Director | For Further Information Contact: Allison Inserro, OAGPress@njoag.gov | |
| Attorney General Davenport Sues OneMain Financial for Packing Loans with Add-Ons to Extract Hundreds of Millions in Junk Fees from Consumers
Bipartisan Multistate Lawsuit Targets OneMain’s Hidden Add-On Products That Drove Up Borrowing Costs and Made Loans Unaffordable

View Complaint
TRENTON – Attorney General Jennifer Davenport and the Division of Consumer Affairs (DCA) today sued one of the nation’s largest subprime installment lenders, OneMain Financial, Inc., for deepening the affordability crisis for consumers by selling them exorbitantly priced loans and charging them hundreds of millions of dollars in hidden junk fees.

The lawsuit was filed by a bipartisan coalition of 12 state attorneys general and alleges that OneMain charged consumers junk fees for add-ons to the installment loans they sold. The complaint alleges that the products were frequently hidden from borrowers or snuck into loans without their consent.

OneMain Financial operates 26 branches in New Jersey and sold roughly $27 million in add-ons in the Garden State between 2021-2022. Despite promises that it offers its loans with “clear, up-front terms,” today’s complaint alleges OneMain instead inflates the cost of its loans with numerous expensive add-on fees that are buried in dense, fine-print loan documents and obscured by misrepresentations.

As the complaint alleges, borrowers are also rushed through in-person loan closings and are provided with even less of an opportunity to adequately review loan disclosures in remote closings. These loan disclosures are often displayed in tiny, hard-to-read print. Even when borrowers spotted the add-ons and tried to decline, OneMain’s alleged policy was to continue to pressure borrowers until they explicitly said “no” three times.

“To make life more affordable, we will hold accountable any business that takes advantage of hardworking New Jerseyans by charging them hidden junk fees and tricking them into purchasing exorbitantly priced products. That’s exactly what OneMain did. New Jerseyans in need of financial assistance came to OneMain for help, but they were sold expensive, inflated loan products they didn’t want and couldn’t afford,” said Attorney General Davenport. “Consumers are struggling under the weight of an affordability crisis, and lenders should not be financially rewarded for multiplying their customers’ debt with expensive products they do not want or need.”

OneMain’s add-on products provided limited value for borrowers while generating massive profits for OneMain, the complaint alleges. The average cost of these add-ons for New Jersey borrowers was $826, yet the products, such as credit “insurance” and “Auto Plus” membership programs, rarely benefited consumers. By contrast, OneMain reaps profits on the add-ons through commissions, underlying profits from the insurance business, and claims on the credit policies to avoid defaults. The complaint also alleges that OneMain exerts financial pressure on its own employees to pack consumers’ loans with add-ons.

“The add-on fees and interest charged by OneMain were rarely, if ever, adequately disclosed or explained, and consumers wound up being charged for products they never agreed to, much less understood,” said Acting DCA Director Jeremy E. Hollander. “Businesses operating in New Jersey must comply with the laws and regulations that protect our consumers against unconscionable and abusive sales and advertising practices. Such conduct will not be allowed to go unchecked in New Jersey.”

Attorney General Davenport and the 13 Attorneys General are seeking:

• Refunds for consumers who were unlawfully charged for these add-on products;
• Penalties for violating state laws; and

• Disgorgement of all profits derived from OneMain’s scheme.
  The lawsuit also seeks a court order that compels OneMain to:

• Stop its illegal practices;

• Withdraw any negative information reported to credit agencies that may impact its customers’ credit scores; and

• Drop any legal proceedings, such as lawsuits and collection actions against customers related to the add-on loan products.
  Any consumers who believe that they or someone they know may be a victim of the business practices of OneMain Financial should file a complaint with the Office of Attorney General online by visiting https://www.njconsumeraffairs.gov/Pages/Consumer-Complaints.aspx.

Joining Attorney General Davenport in this lawsuit are the Attorneys General of Pennsylvania, New York, Colorado, Maryland, Nevada, New Hampshire, North Dakota, Oklahoma, South Dakota, Virginia, Washington, and Wisconsin.

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Last Modified: 3/16/2026 11:43 AM