SD AG Joins Lawsuit Against OneMain Financial for Misleading Customers

AG: South Dakota Press Releases

Filed March 17th, 2026

Detected March 18th, 2026

Summary

South Dakota Attorney General Marty Jackley has joined 12 other states in suing OneMain Financial, Inc. for allegedly misleading customers with hidden costs and unnecessary add-on insurance policies. The lawsuit details a 'bait and switch' scheme that traps borrowers in expensive loans.

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What changed

South Dakota Attorney General Marty Jackley, along with 12 other state Attorneys General, has filed a lawsuit against OneMain Financial, Inc. The suit alleges that the company engages in a pattern of misleading customers by deceptively including expensive insurance policies and other add-on products in loans without clear disclosure or customer consent. The complaint details a 'bait and switch' scheme where consumers are rushed through loan processes, often on smartphones, with fine print buried in lengthy documents, leading them to unknowingly incur significant hidden costs.

This action highlights potential risks for consumers engaging with OneMain Financial, particularly concerning loan terms and add-on products. Regulated entities in the lending sector should review their own sales practices and disclosure procedures to ensure compliance with consumer protection laws and avoid similar allegations. While specific penalties are not detailed in this press release, such lawsuits typically seek injunctive relief and restitution for affected consumers, and may involve significant fines for the company.

What to do next

Review loan origination and disclosure processes for compliance with consumer protection laws.
Ensure all add-on products and associated costs are clearly and conspicuously disclosed to consumers.
Train loan officers on ethical sales practices and prohibitions against deceptive bundling of products.

Source document (simplified)

Attorney General Marty Jackley

A TTORNEY OFFICE OF THE
SOUTH DAKOTA G ENERAL

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Attorney General Jackley Joins Lawsuit Against OneMain Financial, Inc.
FOR IMMEDIATE RELEASE: Tuesday, March 17, 2026

Contact: Tony Mangan, **** Communications Director, 605-773-6878

PIERRE, S.D. – South Dakota Attorney General Marty Jackley has joined a bipartisan group of 13 Attorneys General in suing OneMain Financial, Inc. for illegally misleading its customers and trapping tens of thousands of borrowers in expensive loans with hidden costs.

“This company packs its loans with often senseless insurance policies and other add-on products,” said Attorney General Marty Jackley. “South Dakota consumers are being forced to pay for services they never agreed to and didn’t need.”

OneMain Financial has branches in Rapid City, Sioux Falls, and Watertown. It is not yet known how many South Dakota customers have been impacted.

The lawsuit alleges the following about OneMain’s bait and switch scheme:

OneMain does not advertise that it sells add-on products, so consumers who come through its doors will not expect the company to push these products.
OneMain rushes consumers through the loan process without allowing the consumer to understand, or sometimes even notice, that add-on products have been added to their loans.
OneMain operates an elaborate sales process that purports to disclose the products, but the company puts financial pressure on its employees to hide the add-ons.
OneMain pre-populates its loans with every possible add-on product before rushing through a loan closing process in which its employees control the computer screen that shows the loan documents. This does not allow the consumer time to review each page of the loan application as the employee scrolls through the contract.
OneMain buries the fine print that mentions the add-on products inside 50 pages of legalese, which OneMain prevents consumers from reading before accepting the loan contract.
OneMain often closes loans on smart phones, where already small print shrinks to 1/3 its normal size.
OneMain also misleads consumers when encouraging them to refinance their loans by tacking on add-on products and by hiding key terms. As a result, consumers only discover how much they are paying for the loans after the loans have been completed. Other Attorneys General joining in the lawsuit are from: Colorado, Maryland, Nevada, New Hampshire, New Jersey, New York, North Dakota, Oklahoma, Pennsylvania, Virginia, Washington, and Wisconsin.

The lawsuit can be found here: https://agportal-s3bucket.s3.us-west-2.amazonaws.com/Consumer%20Protection/OneMain%20filed%20complaint.pdf?VersionId=vFZlcOZvSwpn.WO85WYEqEreNBzmU7Ww

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