The Consumer Financial Protection Bureau has ordered OneMain Financial in Evansville, Ind., to pay $20 million to resolve claims the installment lender failed to refund interest charged to 25,000 customers.
The CFPB said in a press release that the enforcement action requires OneMain, a unit of OneMain Holdings, to refund $10 million to harmed consumers and pay another $10 million to the bureau’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 said in the release. “We are ordering OneMain to refund borrowers it cheated and to clean up its business practices.”
The CFPB determined that OneMain’s practices violated the Consumer Financial Protection Act’s prohibition on unfair practices. The bureau claimed the lender charged, then failed to refund, the full premium or fee and interest that accrued on add-on products consumers did not agree to buy.
OneMain was also ordered to adjust its cancellation policies to make cancellation of add-on products easier, along with doubling the period in which a consumer can cancel an unused add-on product without cost from 30 to 60 days.
OneMain Financial was recently fined roughly $4.3 million by the New York State Department of Financial Services for having poor cybersecurity practices.