Six states are suing Mariner Finance over allegations of predatory lending practices.

The lender is owned by private equity firm Warburg Pincus LLC and is alleged to have charged borrowers hundreds of millions of dollars for "hidden" add-on products that they never agreed to buy.

Mariner Finance, with more than 480 offices in 27 states, was accused of engaging in "widespread credit insurance packing," by selling costly policies and other products without telling borrowers or even after the credit insurance was declined by the customers.

The attorneys general of Pennsylvania, New Jersey, Oregon, Utah, Washington, and Washington, D.C. also alleged Mariner encouraged employees to trick borrowers into refinancing loans unnecessarily to generate higher fees and sell more financial add-ons.

The states alleged Warburg, which bought Mariner in 2013 and oversees more than $85 billion of assets, made high-growth demands on Mariner, leading to the unfair practices. The founder of Mariner stated the Nottingham, Maryland-based company had cooperated for nearly four years with the states' investigation and will "continue to defend itself as an important provider of credit options" to people with limited access to credit.

The lawsuit seeks to return borrowers' improper payments, and obtain civil fines, full restitution, and disgorgement of ill-gotten profits. "U.S. states sue Warburg-owned Mariner Finance, allege predatory lending" www.reuters.com (Aug. 16, 2022).