Tuesday, June 11, 2013

Bank Of America Revives Deceptive Loan Advertising Practices

About six months after the government warned lenders against deceptive mortgage advertising, Bank of America is using a misleading pitch and copious fine print to sell borrowers on refinancing plans. The American Banker reported Monday that a mailer from the bank in New Jersey “sounds eerily like a sales pitch from the bubble days of 2005.”

While the mailer touts annual savings of more than $4,000, National Consumer Law Center attorney Andrew Pizor says the refinancing offer would add more than $37,000 to the cost of a borrower’s loan. “I think the pitch is kind of deceptive because it boldly mentions ‘save’ and ‘savings,’ repeatedly, and of course it refers only to the higher interest rate and overall loan amount in the footnotes,” Pizor told the American Banker.

There’s a full page of footnotes in the mailer, in “small type with several disclaimers,” and the American Banker found multiple bank lawyers willing to defend the deceptive pitch because “it discloses everything.” The story includes an image of the mailer:

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