Thirteen State Attorneys General Sue National Installment Loan Lender Over Add-Ons

Thirteen state attorneys general recently filed a complaint against one of the nation’s largest subprime installment lenders, accusing it of systematically packing loans with hidden, expensive, and often unnecessary add-on products.

The complaint alleges that the lender misled its customer base by surprising consumers with insurance product add-ons at closing, burying add-on terms in paperwork, implying that the add-ons are required to obtain the loan, and failing to disclose the true cost of the loan as the add-ons were charged up front and rolled into the amount financed.  As a result, the complaint alleges that these add-ons generated hundreds of millions in extra fees while providing minimal value to consumers. 

The attorneys general seek restitution and refunds for affected borrowers, civil penalties, disgorgement of profits, a permanent injunction barring the deceptive practices, removal of any negative credit reporting tied to the add-ons, and dismissal of related collection actions or lawsuits against consumers.