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Report: Subprime lending giant’s add-on “loan protections” put borrowers in danger

Report: Subprime lending giant’s add-on “loan protections” put borrowers in danger

In this context, Webster points out, calling the add-ons “loan protection items” is misleading. They’ve been, alternatively, “a money cow,” she says.

Almost 1 / 2 of the Denver standard instances the middle analyzed were renewals of previous loans that have been rolled over into new loans. The report alleges that, in performing this, OneMain partcipates in a practice that is deceptive as “default masking.” Over fifty percent for the Denver borrowers whom defaulted on loans had their wages garnished by OneMain, and 43 % filed for bankruptcy, typically following the ongoing business filed against them in court, the report discovered.

Nationwide, OneMain borrowers have actually complained they declined loan insurance coverage add-ons simply to have them added anyway. Some have actually stated they decided to choose the insurance plans with out been offered documents of those or told just just how those policies would influence their month-to-month loan re re payments. Plus some, like Martinez, state they weren’t mindful that by increasing their loan amounts mid-term they certainly were really accepting loans that are brand new new terms.

OneMain’s Anderson, who functions as main lawyer, counters that the organization takes deliberate and consistent actions to be clear. He supplied The Independen t with types of documents the business delivers clients before and after they signing loan agreements showing – he claims in clear terms – they have a range of whether to buy the add-on policies at closing after which are provided the choice to cancel within 1 month of shutting with a complete reimbursement. (more…)