What is the term for the unethical practice where a lender employs deceptive tactics to encourage borrowing?

The term for the unethical practice where a lender employs deceptive tactics to encourage borrowing is predatory lending. This practice involves lenders targeting vulnerable borrowers, often promoting loans with unfavorable terms and hidden fees. Borrowers may be misled about the true cost of the loan, leading to situations where they struggle to make repayments and may end up in a cycle of debt.

Predatory lending tactics can include high-pressure sales techniques, misrepresentation of loan terms, and a lack of clear communication about the consequences of borrowing. Because of its exploitative nature, this practice is heavily scrutinized and regulated in many jurisdictions to protect consumers from unfair lending practices. Understanding this term is essential for recognizing potential abuses within the lending industry and advocating for responsible borrowing practices.