Were You a Victim of OneMain’s Deception?
A short-term installment loan can sometimes be a lifesaver. Or it can seem that way.
You need some cash for an unexpected expense — not just a relatively small payday loan, but a few thousand dollars.
Maybe your credit isn’t great, but you have reliable income and just need some money to bridge a gap.
Enter companies like OneMain Financial. Catering to the “subprime” market, lenders like OneMain offer relatively short-term loans (usually paid back in 2–3 years) at what are usually double-digit interest rates.
Expensive? Yes! But cheaper than a payday loan and with more cash available up front.
Companies like OneMain often attempt to sell you a range of add-on products you don’t need — like credit insurance, a life insurance policy, etc.
Now, OneMain is facing a fine for using deceptive practices to get customers to sign-up for add-on products and then refusing to provide full refunds when customers seek to cancel them.
Here’s more from NewsBreak:
A Consumer Financial Protection Bureau (CFPB) investigation found that the company repeatedly deceived consumers into believing that certain add-on products were required for loan approval. When some customers later asked for refunds — which OneMain claimed were guaranteed — the company then kept a portion of the funds. The CFPB says as many as 25,000 borrowers were defrauded as a result of these practices.
“OneMain pressured its employees to load up its loans with extra charges through false promises of easy cancellation with full refunds,” said CFPB Director Rohit Chopra. “We are ordering OneMain to refund borrowers it cheated and to clean up its business practices.”
The deception will cost OneMain $20 million — including $10 million paid to customers as refunds.