August 18, 2022
Utah Attorney General Reyes announced a multistate lawsuit against Mariner Finance for widespread violation of consumer protection laws. The AG’s suit alleges Mariner Finance charged consumers for hidden add-on products that consumers either didn’t know about or didn’t agree to buy. Consumers left Mariner Finance assuming they had entered into an agreement to borrow and repay, over time, a certain amount of money. In reality, because of these hidden add-on products, Mariner added hundreds to thousands of dollars to the total amount consumers owed. The hidden charges alone amounted to hundreds of millions of dollars nationwide.
The lawsuit alleges that Mariner Finance employees either don’t mention the add-on products to consumers or blatantly misrepresent them. Mariner Finance employees also claim the products are required in order to obtain a loan when they are apparently not required. Some consumers were told by Mariner Finance that add-ons were free or much cheaper than they actually are, while other consumers who explicitly rejected the add-on products were charged for them anyway.
The lawsuit also alleges that Mariner Finance engages in aggressive sales tactics to extend credit to new borrowers. Mariner’s marketing heavily features the fact that consumers can visit a Mariner Financial branch and leave with a check on the same day. Mariner mails hundreds of thousands of unsolicited “live checks” to consumers. Once consumers cash these checks, Mariner aggressively pushes them to visit a branch to refinance and take out additional debt, which typically comes with hidden add-on products, even if it’s not in the best interest of the consumer. These kinds 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 bought Mariner Finance, it had 57 branches in seven states. Today, nine years later, Mariner Finance has over 480 branches in 27 states and manages over $2 billion in loans.
The multistate lawsuit asks the court to order:
- Full restitution to all borrowers affected by Mariner’s unlawful practices
- Repayment by Mariner of any unlawfully gained profits
- Civil penalties
- Rescission or reformation of all contracts or loan agreements between Mariner and consumers affected by the company’s unlawful practices
- Mariner to stop charging consumers for add-on products and cease 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 Division of Consumer protection at 801-530-6601.
This lawsuit was joined by the attorneys general of the District of Columbia, New Jersey, Pennsylvania, Oregon, and Washington. Read it here.