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Business Research Ethics: Predatory Lending

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Business Research Ethics: Predatory Lending
Business Research Ethics
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Predatory lending is a term that many home owners are familiar with in today’s real estate market. Not only is this practice unethical, in many cases it is illegal. When financial institutions violate the consumer trust they hurt more than just the company image. This was the case in 2001 when a Citigroup consumer lending subsidiary used deceptive practices to sell unnecessary insurance coverage to minority, elderly, and uneducated home equity borrowers (Heller, M., & Garver, R., 2001). Citigroup used the information obtained for the unintended purpose of selling additional services. In this case these services were unnecessary insurance premiums that were written into the loan without disclosure to the client.
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The bank preyed on a specific group of clients that fit a description of minority, elderly or uneducated. A former assistant manager of a CitiFinancial branch was quoted saying "If someone appeared uneducated, inarticulate, was a minority, or was particularly old or young, I would try to include all the coverage’s CitiFinancial offered," she said. "The more gullible the consumer appeared, the more coverage’s I would try to include in the loan." (Heller, M., & Garver, R., 2001). This type of unethical practice affected the lifestyle of many people in ways they were

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