Utah sues private loan company for deceiving millions of consumers

August 18, 2022

Utah Attorney General Reyes announced a multistate lawsuit against Mariner Finance for widespread violation of consumer protection laws. The AG lawsuit alleges that Mariner Finance charged consumers for hidden add-on products that consumers were unaware of or did not agree to purchase. Consumers left Mariner Finance assuming they had an agreement to borrow and repay, over time, a certain amount of money. In fact, because of these hidden add-ons, Mariner has added hundreds to thousands of dollars to the total amount owed by consumers. The hidden charges alone amounted to hundreds of millions of dollars nationwide.

The lawsuit alleges that Mariner Finance employees fail to mention the complementary products to consumers or blatantly present them. Mariner Finance employees also claim that the products are necessary to obtain a loan when they are apparently not necessary. Some consumers were told by Mariner Finance that the add-ons were free or much cheaper than they actually are, while other consumers who explicitly rejected the add-ons charged for them anyway.

The lawsuit also alleges that Mariner Finance engages in high-pressure sales tactics to extend credit to new borrowers. Mariner’s marketing strongly emphasizes that consumers can walk into a Mariner Financial branch and walk away with a check the same day. Mariner sends hundreds of thousands of unsolicited “live checks” to consumers. Once consumers cash those checks, Mariner aggressively pushes them to go to a branch to refinance and take on additional debt, which usually comes with hidden add-ons, even if it’s not in the best interest. of the consumer. These types of predatory sales practices can trap 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, 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 asks the court to order:

  • Full restitution to all borrowers affected by Mariner’s illegal practices
  • Reimbursement by Mariner of any Illegally Obtained Profits
  • 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

Mariner Financial has at least one branch in Utah. Borrowers who believe they have been deceived by Mariner’s harmful practices should contact the Consumer Protection Division at 801-530-6601.

This lawsuit was joined by attorneys general from the District of Columbia, New Jersey, Pennsylvania, Oregon and Washington. Read it here.

Janet E. Fishburn