OneMain (OMF) is being sued by New York Attorney General Letitia James and a bipartisan coalition of 12 other state attorneys general for allegedly misleading customers and trapping them in debt, according to a statement from James' office.

The lawsuit claims that OneMain adds expensive and often unnecessary products, like insurance policies, to loans without customers' knowledge or consent. James and the coalition allege that the company's actions "violate state and federal consumer protection laws, including New York's laws against illegal, fraudulent, deceptive, unfair, and abusive conduct and false advertising."

The suit seeks restitution for consumers who were illegally charged for add-on products, along with penalties and repayment of all unlawful profits. It also seeks a court order to stop OneMain from continuing these practices, remove any negative credit reporting linked to these products, and drop any legal actions against customers related to the add-ons, according to the statement.

"The states' allegations are simply untrue -- their case is wrong on the facts and wrong on the law and attempts to relitigate issues that were already reviewed by the Consumer Financial Protection Bureau and fully resolved," OneMain told MT Newswires, adding that it plans to defend itself in court.

Shares of OneMain fell past 10% in the session.

Price: 47.75, Change: -4.31, Percent Change: -8.28