“OneMain is pleased to resolve this matter related to our refunding practices for some optional products, even though we do not agree with the CFPB’s conclusions,” the company said. In a statement issued the same day the settlement was announced, OneMain said that it will abide by the terms of the order even though the company takes issue with some of the conclusions drawn by the CFPB. CFPB also ordered OneMain to “include interest in refunds after add-on product cancellations at any time.”ĬFPB has ordered OneMain to pay $10 million in redress to consumers for improper charges, and an additional $10 million penalty to the Bureau to be deposited into its victims relief fund. The enforcement action orders OneMain to adjust its cancellation policies to make them easier, and to double the applicable cancellation period for add-on products from 30 to 60 days. “Because of how OneMain precomputed interest on some loans, customers had already been charged significant amounts of interest that the company did not refund.” “However, OneMain unfairly failed to refund interest charges for about 25,000 borrowers who signed up for add-ons such as roadside assistance benefits, identity theft protection, or entertainment discounts,” the Bureau said. CFPB also said that some employees added some additional products to a loan’s paperwork, and made it seem as if they would be too onerous to remove if a consumer identified them as part of their loan.ĬFPB also says that OneMain kept $10 million in interest charges despite a stated policy offering borrowers a “full refund” on add-on purchases if they canceled within a certain period of typically around 30 days. Salespeople were evaluated on the basis of their sales rate and could even be fired if they did not upsell enough.”Īs a result, CFPB says that OneMain “tricked” borrowers into signing up for additional products, with some customers believing that they could not receive a loan unless they purchased one of the add-on products. “Employees were incentivized to push more products, and company training materials directed them to upsell them even when consumers had already declined the products on previous loans. “OneMain expected its employees to upsell borrowers on every loan,” the CFPB said. This is where an additional grievance was found by the Bureau.
The CFPB’s order is specifically focused on OneMain’s status as an installment lender, saying that it routinely offers additional products and services alongside its loans including roadside assistance, unemployment coverage and identity theft coverage. “We are ordering OneMain to refund borrowers it cheated and to clean up its business practices.”
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“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 in announcing the action.
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