Oregon sues National Lending Company for misleading customers with hidden add-on products

Attorney General Ellen Rosenblum today announced a multi-state lawsuit against the lending company Mariner Finance for violating the federal consumer financial protection law. The company allegedly hid complementary products that consumers did not know about or were unwilling to buy. Mariner Finance customers assumed they had an agreement to borrow a certain amount of money and pay it back over time. These hidden add-on products meant that Mariner was adding to the total amount owed by a consumer, which amounted to hundreds of millions of dollars nationwide.

This filing marks the first time the Oregon Department of Justice has filed a federal complaint under the Consumer Financial Protection Act.

Mariner, which describes itself on its website as providing “hard-working consumers with responsible access to credit through respectful, compassionate, and efficient service,” began selling loans in Oregon with add-ons in September 2021. Over the past year, Mariner has made 371 direct phone loans to Oregonians: 88 of those loans have included add-ons.

“Mariner pressures and tricks its employees into tricking borrowers into paying hundreds of dollars for insurance products they don’t need or want,” Attorney General Rosenblum said. . “The company pulls off this deception by using an electronic loan document process that rushes borrowers through the signing process. Even though Mariner does not have a physical location in Oregon, they still solicit business with Oregonians by mail, phone, and online. I hope this lawsuit sends a clear message to Mariner and other installment lenders that insurance wrapping, loan rollover and other predatory lending practices will not be tolerated in Oregon or anywhere else.

Specifically, the lawsuit alleges that Mariner Finance employees fail to mention the complementary products to consumers or blatantly portray them. Mariner Finance employees also claim that the products are necessary to obtain a loan, even though they are not. Some consumers were told by Mariner Finance that the add-ons were free or much cheaper than they were, while other consumers who rejected the add-ons were charged anyway. The lawsuit also alleges that Mariner Finance engages in high-pressure sales tactics to extend credit to new borrowers.

Mariner Finance is owned by a Wall Street private equity fund managed by Warburg Pincus LLC. When Warburg Pincus purchased Mariner Finance, it had 57 branches in seven states. Today, Mariner Finance has more than 480 branches in 27 states and handles more than $2 billion in loans.

The multi-state lawsuit asks the court to order:

  • Full restitution to all borrowers affected by Mariner’s illegal practices
  • Reimbursement by Mariner of any profit made illegally
  • Civil penalties
  • Termination or reform of all contracts or loan agreements between Mariner and consumers affected by the company’s illegal practices
  • Mariner will stop charging consumers for complementary products and stop other harmful practices

In addition to Oregon, today’s lawsuit was joined by the District of Columbia, New Jersey, Pennsylvania, Utah and Washington.

Troy M. Hoffman