Pa. joins multi-state suit against Mariner Finance loan company; alleges predatory practices

Pennsylvania is seeking more than $27 million in restitution from a finance company the state claims added hidden charges to loans and interest from those fees over three years through what it claims are “predatory” practices, according to a multi-state lawsuit the attorney general filed with four other states and Washington, D.C.

Attorney General Josh Shapiro on Tuesday claimed Mariner Finance of Baltimore, a consumer lending company, committed widespread consumer law violations by adding hidden costs that consumers either did not know about or never agreed to purchase.

Mariner has branches in New Kensington, Hempfield, North Huntingdon, Bridgeville, Cranberry, Washington, Uniontown and Butler.

The eight-count, 104-page lawsuit filed in U.S. District Court in Philadelphia details stories of Mariner employees engaging in deceptive practices during the loan process, including convincing a disabled Army combat veteran deployed four times to take almost $3,000 in add-on charges when obtaining a $4,081 loan. The lawsuit does not identify whether the borrower was from Pennsylvania.

Mariner charged Pennsylvanians $19.5 million for add-ons from 2015 to 2018 and charged another $8 million in interest for these premiums in the same period, the state attorney general said.

“Products consumers never asked for and often didn’t realize they’d been signed up for were tacked on to a kind of loan that we already know people struggle to pay back,” Shapiro said in a statement.

Pennsylvania was joined in the lawsuit by the attorneys general in Washington, D.C., and New Jersey, Oregon, Utah and Washington.

It seeks full restitution for all the consumers impacted by the allegedly deceptive practices and for the court to order Mariner to cease charging customers for the add-on products. The attorneys general wants Mariner to repay any unlawfully gained profits from those deceptive practices.

Company denies accusations

Mariner Finance has continuously disputed the claims the multi-state coalition has alleged 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 CEO John Johnson said in a statement. The company has 480 branches in 27 states and manages more than $2 billion in loans.

The attorney general said, however, that consumers left a Mariner office under the belief the loan would be for a specific period and could cost a specific amount of money, only to find that hundreds to thousands of dollars were added to a consumer’s loan, Shapiro said.

The lawsuit alleges that Mariner Finance employees either did not reveal the add-on products to consumers or misrepresented them. Mariner Finance employees also claimed the products are required to obtain a loan, when technically no such requirements exist, Shapiro said.

The states’ allegations are based on minimal consumer interviews, the company claims. They reflect a misunderstanding of the law, or simply a decision to ignore any evidence that negates their claims, Mariner said in its statement.

But, Shapiro said that some Mariner Finance clients were told that at add-ons were free or much cheaper than they actually were. Other consumers who rejected the add-on products were charged for them anyway.

The lawsuit also alleges Mariner Finance engaged in illegal, aggressive sales tactics to extend credit to new borrowers, such as mailing hundreds of thousands of unsolicited “live checks” to consumers. Once consumers cash these checks, Mariner pushes them to visit a branch to refinance and take out more debt that often had hidden add-on products.

In defending the company, Johnson said the Federal Trade Commission did not act after conducting a two-year investigation into similar issues. Johnson said a full and fair consideration of the evidence from the investigation “should lead to this matter being immediately dismissed with no further action.”