This Center for Public Integrity's ongoing Debt Deception project is investigating gaps in the oversight of abusive consumer lending practices. Today's story found some U.S. auto dealers use tactics similar to the sorts of abuses seen in subprime mortgage lending, including:
- Dealers routinely charge higher interest rates than customers qualify for and split the extra profit with the lender.
- Dealers sometimes call buyers days or weeks after a purchase to say their financing has fallen through, often forcing buyers to renegotiate the deal on worse terms.
- Unscrupulously dealers will lie on the buyers’ application form to qualify them for a loan that they can’t afford.