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  The Society for Consumer Advocates and Mavens

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PREDATORY MONEY LENDERS

Major auto-makers make millions of dollars loaning people money for new cars, as well as on "debt consolidation" loans for people who need to pay-off credit card bills and other expenses. However, these loans to pay-off debt may be at high interest rates with all kinds of potentially hidden or undisclosed fees which may drive up the cost of borrowing the money. In fact, the exorbitant costs you may have to pay to get one of these debt consolidation loans may actually force you to have to sell your home just to be able to pay-off the new loan!

When this happens this is called predatory money lending. These lenders have been accused of preying on lower income people who already have lots of equity built up in their homes or who have even already paid off the mortgage loan on their home. What happens next is the predatory money lender entices the homeowner to borrow money against their home to pay-off some nagging bills or creditors.

This is when the "flip" takes place. Flipping is when the lender gets the homeowner into more and more loans as the years go by "packing" more and more costs into the debt consolidation loans, like unnecessary home and auto insurance coverage, so the cost of the loan skyrockets for the unsuspecting homeowner borrower.

At least one American auto-maker has even been accused of having a "designated forger" in their loan offices to sign-off on fee approvals WITHOUT the borrower or signee even being aware their signature was forged on a loan document!

Remember, these type lenders may be world reknown billion dollar corporate conglomerates which utilize persuasively "slick" advertising campaigns and public relations firms to create convincing "spins" seen around the world.

Your best bet may to always be suspicious of anyone who represents any company concerning selling you on the idea of taking out a debt consolidation loan to pay-off your bills, no matter how impressive the company name or sales pitch may be,

SUPPLEMENTAL SOURCE: ABC-TV PRIMETIME LIVE 4/23/97

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