Abusive lending can manifest itself in various loaning practices and at different phases of the lending process:
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It can begin at the marketing stage and include aggressively pursuing vulnerable groups, like minorities and the most financially desperate. This is also called “predatory lending.”
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Abusive lending may entail misleading or false advertising of loan products and lenders failing to ensure that borrowers can afford loans through, for instance, proper credit assessment. This is also referred to as “reckless lending.”
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At the contract formation stage, abusive lending may take place through contracts that contain misleading or unfair terms or otherwise violate the law by, for example, omitting key terms.
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Abusive practices can also take place in the enforcement of loans, regardless of the propriety of the initial agreement. This may be the case when lenders harass borrowers in arrears or when courts order evictions even if loan agreements contain unfair terms.