Acting Attorney General Matthew J. Platkin today announced the filing of a multistate lawsuit against Maryland-based Mariner Finance for widespread violations of consumer protection laws, including the adding expensive and hidden ‘extra’ products, such as credit insurance, to the loans of consumers who never agreed to buy them.
The lawsuit alleges non-bank lender Mariner routinely charged consumers for add-on loan products without mentioning them or went ahead and signed consumers up for the add-ons despite their stated rejection of those offers – resulting in hundreds of thousands more dollars. debt.
As the complaint alleges, Mariner particularly benefited vulnerable consumers with limited access to credit who were already saddled with debt and who had little or no other options available to them to obtain a personal loan they greatly needed. need.
The complaint further alleges that Mariner encouraged its employees to add bonuses to consumer loans and that the company punished management employees whose branches failed to meet Mariner’s minimum sales targets for add-ons.
Nationally, Mariner’s alleged practice of attaching these hidden “extra” fees amounted to hundreds of millions of dollars in aggregate additional consumer debt.
“Mariner’s alleged conduct is deeply troubling, particularly his exploitation of individuals and families in need – people who were already saddled with debt and had little recourse for help,” said Acting Attorney General Platkin.
“It is hard to imagine a business model based on such predatory practices, but one thing is certain – such lending practices are illegal in New Jersey, and we will hold accountable any company that engages in such conduct. ”
Today’s lawsuit alleges that Mariner employees either failed to mention the add-on products to consumers when processing their loans or grossly misrepresented them.
For example, in cases where Mariner employees disclosed the add-ons, they often misrepresented consumers by telling them that the add-ons were not optional but rather necessary to obtain a loan. Add-ons were not needed.
Additionally, some consumers were told by Mariner that the add-ons were free or significantly less than their actual cost, while other consumers, who explicitly declined the add-ons, were charged anyway.
The lawsuit also alleges that Mariner engaged in aggressive and harmful sales tactics to extend credit to new borrowers.
For example, Mariner’s marketing has heavily promoted the fact that consumers can walk into a Mariner Finance branch and walk away with a check the same day.
Mariner also sent out hundreds of thousands of unsolicited “live checks” to consumers.
Once consumers cashed those checks, Mariner aggressively pushed them to visit a Mariner branch to refinance and take on additional debt, which usually came with hidden add-on products.
These tactics often ended up trapping many consumers in a cycle of debt.
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, just nine years later, Mariner Finance has more than 480 branches in 27 states and handles more than $2 billion in loans.
The multi-state lawsuit filed today asks the Court to order:
- Full restitution to all borrowers affected by Mariner’s illegal practices
- Reimbursement by Mariner of any Illegally Obtained Profits
- 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
- Civil penalties
Mariner Finance has nine branches in New Jersey. Consumers who believe Mariner has deceived them should file a complaint with the New Jersey Division of Consumer Affairs. here.