Mariner Finance’s illegal conduct fueled rapid growth under ownership of a Wall Street private equity fund run by Warburg Pincus LLC
HARRISBURG, PA – Attorney General Shapiro today announced that he is pursuing a multi-state lawsuit against Mariner Finance for widespread violations of multiple consumer protection laws. The lawsuit alleges that Mariner Finance charged consumers for hidden add-on products that consumers did not know about or did not agree to purchase. Consumers left Mariner Finance thinking they had made a deal to borrow and repay, over time, a certain amount of money. In reality, because of these hidden add-on products, Mariner has added hundreds to thousands of dollars to the total amount owed by a consumer. Mariner charged Pennsylvanians $19.5 million for additions from 2015 to 2018 and charged an additional $8 million in interest for those bonuses during the same period.
“Mariner Finance bolstered its bottom line by cheating hard-working Pennsylvanians,” AG Shapiro said. “Products that consumers never asked for and often didn’t know they had subscribed to have been added to a kind of loan that we already know people struggle to repay. These tactics are predatory and any company we find engaging in them will have to answer to my office in court.
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 required to obtain a loan when technically no requirement exists. Some consumers were told by Mariner Finance that the add-ons were free or much cheaper than they actually were, while other consumers who explicitly rejected the add-ons charged for them anyway.
The lawsuit also alleges that Mariner Finance engages in illegal and aggressive 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 lead consumers into a cycle of indebtedness that is difficult to overcome.
A Harrisburg consumer told the attorney general’s office that a Mariner employee took her to a small room with a computer containing loan documents. She said, “It wasn’t until I got home that I realized my monthly payment was really high. I looked through my papers and realized I had been billed for three forms of insurance that I didn’t want.
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 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 unlawful practices
- Mariner will stop charging consumers for complementary products and stop other harmful practices
Mariner Financial has 39 branches in Pennsylvania. Borrowers who believe they have been deceived by Mariner’s harmful practices should file a complaint with the Bureau of Consumer Protection either online, by phone at 1-800-441-2555, or by email [email protected] .
Today’s trial was led by Pennsylvania Attorney General Josh Shapiro and joined by attorneys general from the District of Columbia, New Jersey, Oregon, Utah and Washington.
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