Predatory lending is unfair, deceptive, or fraudulent lending practices, usually backed by collateral that can be repossessed or foreclosed on if the borrower defaults on their loan. Lenders are often accused of tricking the borrower into thinking that their interest rate is lower than it actually is and that they will be able to repay the loan. Although predatory lenders tend to target the less educated, the poor, racial minorities, and the elderly, anyone can be a victim of this practice. Predatorial lending may not always be illegal, but it can leave victims with bad credit and unmanageable debt. Continue reading
Tag Archives: automobile lending scam
Auto Loan Dealer Fees Accused Of Violating Fair Lending Rules
Approximately eighty percent of all automobile buyers requiring financing, get their loans through the dealership where they are purchasing their vehicle. The dealerships extended hours and “approval while you wait” make it easy for consumer’s to get their financing and their new vehicle the same day. According to a recent report from the Federal Reserve Bank of New York, what you gain in convenience, you pay for in high interest rates and fees. This problem has prompted a number of government investigations into the growing business of auto lending. Continue reading
Auto Lender Practices Questioned
Last month, U.S. automobile lenders received subpoenas from the Consumer Financial Protection Bureau (CFPB) over the sale of extended warranties, add-ons and other financial products. Regulators are probing whether the terms and prices of these products are adequately disclosed to consumers and are questioning if some lenders may be using them as a way of boosting profits. Continue reading
Auto Financing Scam
In 2011, the Federal Trade Commission (FTC) held a series of discussions to explore corrupt practices in the automobile lending market. One abuse that seemed to be particularly prevalent was the “yo-yo scam”. Reports showed that consumer’s dealing with auto finance problems experienced a yo-yo scam approximately 30 percent of the time. Continue reading
