PREDATORY PRACTICES BY BUSINESS
The word predatory can be explained as taking undue advantage of any naïve person for personal benefit. A general example could be obtaining signatures, on a legal document, of someone who is uninformed about the facts, for private interest. In terms of business, “predatory practices” are referred to “plan to monopolize” so that competitors can be kicked out. Unfair practice may take many forms. With reference to lending “predatory practice” would suit the situation where senior citizens sign the loan without knowing the clear terms and conditions. In such a situation, the lender can take an undue advantage for making personal profits. BACKGROUND
In the time of 1880’s, the industries following “monopoly” were found to flourish 7 times higher than the national growth. Business leaders who wanted to achieve efficiency, started to join together in the interest of forming trusts. Those who were unable to practice businesses efficiently started blaming the trusts for building monopolies. Lobbying government was also done to hinder the success of trusts. They put allegations on trust for getting richer at the expense of people. They wanted their money made from the business to be seized. It was said that these monopolies were illegally made to increase profits by raising the prices. Keeping aside the facts to be true or not, a decade later in 1890, an act entered to prevent monopoly known as Sherman anti-trust act named on the senator John Sherman. The law was not able to clearly define the terms “monopoly” , “anti-competitive” and “predatory”. http://waltercoffey.wordpress.com/tag/predatory-business-practices/ TYPES OF PREDATORY LENDING
HIGH PRICES: Extending loans to borrowers who are not trust worthy on basis of credit as a result charging high prices. INSURANCE BASED: The policy support the payment of insurance if the homebuyer’s death takes place. This is more costly because no checkups...
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