Lender Abuse Worldwide (Who Knew?)

Posted by admin on Jul 25, 2011 in Blog | 0 comments

Dateline: July 23, 2011

OMG – it’s not just Americans who are being screwed and cheated by financial institutions. Consumers in other countries have their own demons in the form of banks and consumer credit companies. In an article entitled “Rise of Consumer Credit in Chile and Brazil Leads to Big Debts and Lender Abuses“, the NY Times unveils corrupt lending practices in South America that ensnare and enslave South American consumers using truly unscrupulous lending.

Unfortunately for South Americans, their legal system provides almost no protection from even the most egregious lending practices. As a result, annual interest charges can top 220 percent and consumers cannot seek bankruptcy protection.

“They are learning every trick that was learned in the United States to make credit cards the most valuable part of the banking business”, according to the article.

The lesson is obvious for consumers in the United States. Although America has consumer protection laws, lenders and lending institutions are at work devising new ways to circumvent those laws and entrap consumers with clever come-ons that offer low-cost loans with seemingly great terms. But be warned, as this is a dangerous game and once a consumer becomes caught up in debt, lenders sock them with usurious fees and interest rates that even the mafia would envy.

As a consumer, you CAN beat the bankers by NOT PLAYING THEIR GAME. The first rule is to have a solid plan that enables you to be debt-free in as short a time as possible. Then, play the game by your rules – primarily by avoiding being trapped in a game you can’t get out of. Remember that they can’t entrap you if you don’t play their game! So, what can the average family do to protect themselves? First, take the long view of things. That is to say, pay off the big ticket necessities first. You need a house and perhaps a car so those will take the biggest bite out of your monthly budget. Prioritize paying those off – especially the house. Image if you could pay off your home in as little as 10 to 12 years! It’s not as difficult as you might think. With your home fully paid, you’ll not only have far more discretionary income each month. You will also have security and peace of mind should you lose your job in the future.