The $20 million in redress and penalties stems from a consent order between OneMain Financial Group and the CFPB. The company has agreed to the bureau’s remedies, many that are already in place.
06/02/2023 2:20 P.M.
2 minute read
The Consumer Financial Protection Bureau filed a consent order on May 31 requiring lender and mortgage servicer OneMain Financial Group to pay $20 million in redress and penalties for reported violations of the Consumer Financial Protection Act.
The CFPB said the company “failed to refund interest charged to 25,000 customers who cancelled purchases within a purported ‘full refund period,’ and for deceiving borrowers about needing to purchase add-on products to receive a loan,” according to a news release.
OneMain will pay $10 million in refunds to consumers, and an additional $10 million penalty to the CFPB’s victims relief fund.
The company provided the following statement in response to the consent order to ACA International:
“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. OneMain has agreed to issue interest refunds to the fewer than one percent of our customers who, within the last four years, received a refund of their premium or fee through a check rather than a statement credit after canceling an optional product within 30 days of purchase.
Many of the enhancements identified in the Consent Order have already been in place at OneMain for years, and the remainder have been completed, or are expected to be completed this year.”
The CFPB’s order requires OneMain to:
- Adjust cancellation policies: The order requires OneMain to adjust its policies to make cancellation of add-on products easier, double the period in which a consumer can cancel an unused add-on product without cost from 30 to 60 days, and include interest in refunds after add-on product cancellations at any time.
- Provide redress to consumers: The order requires OneMain to pay $10 million in refunds to consumers for improper charges.
- Pay $10 million in penalties: OneMain is required to pay a $10 million penalty to the CFPB, which will be deposited into the CFPB’s victim’s relief fund.
Read the consent order (PDF) here.
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