Colorado AG Sues OneMain Financial for Deceptive Lending

Colorado AG Press Releases

Filed March 16th, 2026

Detected March 16th, 2026

Summary

Colorado has joined a multistate lawsuit against OneMain Financial, alleging deceptive lending practices and hidden fees that inflated borrowers' costs. The lawsuit seeks restitution for consumers, civil penalties, and injunctive relief to stop the alleged unlawful practices.

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What changed

Colorado, along with 12 other states, has filed a lawsuit against OneMain Financial, Inc., alleging deceptive and unlawful lending practices. The complaint specifically claims that OneMain pushed costly insurance policies and other add-on products, significantly increasing loan costs for consumers, particularly those with subprime credit. The lawsuit also alleges the sale of unlawful Guaranteed Asset Protection (GAP) products and that the company pressured employees to sell add-ons, rushed loan closings, and buried disclosures within lengthy documents, making it difficult for consumers to review terms and understand the total cost of their loans.

Regulated entities, particularly those in the consumer lending sector, should review their sales practices, add-on product disclosures, and GAP product offerings to ensure compliance with state and federal lending laws. The lawsuit seeks restitution for affected consumers, civil penalties, and injunctive relief, including halting collection actions tied to the add-on products. While no specific compliance deadline is mentioned for other entities, this action signals increased scrutiny on lending practices and potential for significant penalties for violations.

What to do next

Review loan origination and add-on product sales processes for compliance with deceptive lending laws.
Ensure all loan terms, fees, and add-on product costs are clearly and conspicuously disclosed to consumers.
Verify compliance with state-specific regulations regarding loan-to-value limits for GAP products.

Penalties

Restitution for affected consumers, civil penalties, and requiring the company to return profits obtained through its unlawful practices. The lawsuit also asks the court to stop the alleged practices, remove related negative credit reporting, and halt collection actions tied to the add-on products.

Source document (simplified)

Attorney General Weiser sues OneMain Financial over hidden loan add-ons that inflated borrowers’ costs

March 16, 2026 (DENVER) — Attorney General Phil Weiser today announced that Colorado has joined a multistate lawsuit against OneMain Financial, Inc. and related entities, alleging the company engaged in deceptive and unlawful lending practices that saddled consumers with hundreds of millions of dollars in hidden fees and inflated interest charges.

The complaint alleges that OneMain markets installment loans with “clear, upfront terms,” including to borrowers with subprime credit, but then pushes costly insurance policies and other add-on products that significantly increase the cost of the loan. The lawsuit also alleges that OneMain sold unlawful Guaranteed Asset Protection, or GAP, products to Colorado consumers, charging excessive premiums on loans that exceeded the 150% loan-to-value limit allowed under Colorado law.

“OneMain targeted people who were already facing financial challenges and made their loans far more expensive through hidden add-ons and misleading tactics,” said Attorney General Weiser. “Colorado law requires transparency and honesty in lending. When companies take advantage of consumers instead of treating them fairly, we will hold them accountable.”

The lawsuit also alleges that although OneMain has written policies intended to prevent unlawful add-on practices, its actual loan processes often operate differently. The complaint claims OneMain pressures employees to sell add-on products and rushes consumers through loan closings, sometimes controlling the computer screen displaying loan documents so borrowers have little time to review the terms. Disclosures about add-on products are buried within lengthy loan documents, and closings often occur on smartphones where already small text becomes difficult to read, while the company emphasizes monthly payments instead of the total cost of the loan.

The complaint also claims that OneMain encourages borrowers to refinance their loans repeatedly, extending loan terms, adding new fees, and packing in additional add-on products that can leave consumers paying far more than they originally borrowed.

The coalition is seeking restitution for affected consumers, civil penalties, and requiring the company to return profits obtained through its unlawful practices. The lawsuit also asks the court to stop the alleged practices, remove related negative credit reporting, and halt collection actions tied to the add-on products.

Joining Attorney General Weiser in the lawsuit are the attorneys general of New York, Maryland, Nevada, New Hampshire, New Jersey, North Dakota, Pennsylvania, Oklahoma, South Dakota, Virginia, Washington, and Wisconsin.

Consumers who believe they may have been affected by OneMain’s practices can file a complaint with the Colorado Attorney General’s Office at StopFraudColorado.gov or by calling 1-800-222-4444.

Read the filed complaint (PDF).

Media Contact:
Mallory Boyce
Communications Specialist
720-219-1898 (cell)
Mallory.Boyce@coag.gov

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