HARRISBURG, PA — In a significant expansion of a legal battle against Mariner Finance, accused of exploiting consumers through deceptive lending practices, six new states have joined Pennsylvania in a federal lawsuit that seeks to redress wide-ranging violations of consumer protection laws. This coalition, now comprising eleven states, underscores a concerted effort to confront practices that allegedly cost consumers hundreds of millions of dollars.
Illinois, Indiana, New York, North Carolina, Tennessee, and Wisconsin have officially entered the fray, granted motion to intervene by the court this week. The lawsuit, initiated in 2022 by Pennsylvania alongside the District of Columbia, New Jersey, Oregon, Utah, and Washington, targets Mariner Finance, a company owned by the Wall Street private equity fund Warburg Pincus LLC. With over 480 branches across 27 states, Mariner manages more than $2 billion in loans, positioning itself as a significant player in the consumer lending space.
The heart of the lawsuit lies in allegations that Mariner Finance engaged in deceptive practices by concealing fees and costs associated with add-on products, thereby inflating the total amount owed by consumers. “This mega lending company preyed on and deceived consumers,” Attorney General Michelle Henry stated, highlighting the aggressive tactics used to entice existing borrowers into further debt under obscured terms.
A pivotal moment came several weeks prior when the court denied Mariner Finance’s motion to dismiss all claims, allowing the collective legal challenge to proceed efficiently in one court. This decision not only preserves the states’ resources but also signals a unified front against what the plaintiffs describe as predatory lending.
The states’ amended complaint, filed Monday, paints a troubling picture of Mariner’s operations. It alleges the company charged consumers for hidden add-on products without their knowledge or consent, significantly increasing the debt burden on unsuspecting borrowers. In 2019 alone, Mariner reportedly levied $121.7 million in premiums and fees for these add-ons, a figure that doesn’t account for the additional interest earned on these costs.
Moreover, the lawsuit accuses Mariner of employing illegal, aggressive sales tactics to extend credit to new borrowers, including the distribution of unsolicited “live checks.” These checks, once cashed by recipients, serve as a gateway for Mariner to encourage refinancing and additional borrowing under terms unfavorable to consumers.
The coalition of states is seeking a comprehensive remedy that includes full restitution for affected borrowers, repayment of unlawfully gained profits, and the rescission or reformation of all contracts or loan agreements tainted by Mariner’s alleged unlawful practices. Additionally, the lawsuit calls for Mariner to halt its practice of charging for add-on products and cease other harmful practices, alongside civil penalties for its actions.
In response to the Pennsylvania Attorney General, a Mariner spokesperson issued a statement vehemently disputing the allegations against the company.
According to the spokesperson, “These are the same claims that have been reviewed and vetted by multiple agencies over the past six years, without a single finding of wrongdoing by any authoritative body. Mariner Finance has continuously disputed the claims throughout this exhaustive process and will continue to defend itself as an important provider of credit options to those who may have limited access to other sources of consumer credit. Mariner has been and continues to be committed to compliance regarding all state and federal regulations, holding itself to a high standard of customer care.
“Mariner has cooperated with the investigation and provided information that clearly demonstrates the legality of its products and the vital support they provide to consumers. The meritless allegations are based on minimal consumer interviews, the details of which were never shared with Mariner, and reflect a misunderstanding of the law, or simply a decision by the additional parties to disregard evidence which negates their claims.
“The Federal Trade Commission (“FTC”) conducted a comprehensive follow-on two-year investigation of these allegations as did other state attorneys general. All of these investigations have been closed with no action taken by any of these agencies. Even as additional parties have ignored the outcome of these investigations, a full and fair consideration of the facts at hand should lead to this matter being closed with no further action.”
As the legal proceedings unfold, the outcome could set a precedent for how lenders operate and directly impact the financial well-being of countless Americans.
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