Six more states have joined a lawsuit against a financial company for violations of multiple consumer protection laws that cost consumers hundreds of millions of dollars.
The suit is against Mariner Finance, and it was initially filed by Pennsylvania, the District of Columbia, New Jersey, Oregon, Utah, and Washington in federal court. Just recently, six more states have joined the suit, including Illinois, Indiana, New York, North Carolina, Tennessee, and Wisconsin. They filed a Motion to Intervene in the lawsuit, which the court granted this week.
Also, this week, the states filed a second amended complaint. This comes several weeks after the court denied Mariner Finance’s motion to dismiss all claims, which enabled the lawsuit to proceed in one court.
“This mega lending company preyed on and deceived consumers by hiding fees and costs for products, while illegally soliciting existing borrowers who already were struggling to afford payments to take on even more debt,” Pennsylvania Attorney General Michelle Henry said. “Pennsylvania now has eleven state partners in litigation that seeks restitution for consumers and complete makeovers of all existing loan agreements.”
The suit alleges that Mariner Finance charged consumers for hidden add-on products that consumers either didn’t know about or didn’t agree to buy. Through these hidden add-on products, Mariner added hundreds to thousands of dollars to the total amount a consumer owed. In 2019 alone, Mariner charged consumers $121.7 million nationwide in premiums and fees for these add-on products.
In addition, the lawsuit alleges that Mariner Finance engaged in illegal, aggressive sales tactics to extend credit to new borrowers. Mariner markets that consumers can visit a Mariner Financial branch and leave with a check on the same day. Once consumers cash these checks, Mariner aggressively pushes them to visit a branch to refinance and take out additional debt, which typically comes with hidden add-on products, even if it’s not in the best interest of the consumer.
The lawsuit asks the court to order:
• Full restitution to all borrowers affected by Mariner’s unlawful practices;
• Repayment by Mariner of any unlawfully gained profits;
• Rescission or reformation of all contracts or loan agreements between Mariner and consumers affected by the company’s unlawful practices;
• Mariner to stop charging consumers for add-on products and cease other harmful practices; and
• Civil penalties.
Mariner Finance is owned by a private equity fund managed by Warburg Pincus, operating over 480 branches in 27 states and managing more than $2 billion in loans.