CFPB Fines OneMain Financial, Claiming ‘Illegally Withheld Refunds’


The Consumer Financial Protection Bureau has ordered personal loan lender OneMain Financial to pay $20 million for allegedly pushing borrowers to purchase add-on products in order to receive a loan and withholding refunds on these products, the bureau announced on Wednesday. The lender will pay $10 million to affected clients, with an additional $10 million penalty going toward the CFPB’s victims relief fund.

“OneMain pressured its employees to load up its loans with extra charges through false promises of easy cancellation with full refunds,” CFPB Director Rohit Chopra says in a statement.

OneMain Financial is one of the largest nonbank personal loan lenders in the country, with more than 1,400 branches operating in 44 states. Among those affected are 25,000 borrowers who were charged interest related to add-on products, like roadside assistance and unemployment coverage, after canceling their purchases within the lender’s “full refund period.”

If you’ve borrowed a personal loan from OneMain Financial with added financial products that you later canceled, you may be entitled to a refund. Here’s what to know about the CFPB’s latest guidance.

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Who Qualifies for a Refund From OneMain Financial?

You may be owed a refund from OneMain Financial if the following three things apply to you:

  • You borrowed a personal loan from OneMain Financial during the past four years.
  • You were sold add-on products that you later attempted to cancel.
  • You were charged interest on these products within the full refund period.

Over the past four years, the CFPB claims OneMain kept $10 million in interest charges that were attributable to add-on products like roadside assistance, credit life and disability insurance, identity theft protection, unemployment coverage and entertainment discounts. OneMain salespeople were expected to upsell these products “on every loan,” with the risk of being fired if they didn’t upsell enough.

The CFPB found cases of OneMain employees “pre-packing” loan paperwork to include these add-ons without informing the borrower these products were included or optional. In some cases, “employees were expected to make it seem difficult to remove the products” from the loan agreement – in others, employees concealed or “verbally contradicted” written disclosures, the CFPB said.

The CFPB has ordered OneMain to adjust its policies to make it easier to cancel add-on products, extending its cancellation period for unused add-ons from 30 days to 60 days. Going forward, OneMain must also include interest in refunds when a borrower cancels an add-on product.

Additionally, OneMain Financial must “refund borrowers it cheated,” Chopra says, with 25,000 customers expected to qualify for their share of the $10 million redress.



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