Lending violations and deceptive practices occur when companies involved in the financial industry take advantage of consumers for their own financial gain. They allegedly do so to make a larger profit, to decrease the amount of money the financial institution spends, or to make the financial institution appear more financially stable than it actually is. These unethical organizations include financial institutions, credit card issuers and mortgage lenders who violate their contracts with their clients or engage in abusive practices. Despite consumer protection laws designed to prevent such abuse, there are still violations of consumer laws that often leave the consumer without his or her hard-earned money.
Consumer Banking Violations
Bank Accounts
Overdraft Fees
Prepaid Debit Cards
Credit Cards
Mortgages and Home Equity Loans
HELOC
Consumer Banking Violations
Despite consumer protection laws designed to prevent abusive practices on the part of the financial industry, there are still some unethical practices that consumers fall prey to. These include issues with bank accounts, overdraft fees, prepaid debit cards, credit cards, mortgages and home equity loans, and home equity lines of credit (HELOCs). Furthermore, consumer banking violations can occur when certain people or groups of people are excluded from certain banking services or are not made aware that those services exist.
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Bank Accounts
 Issues with bank accounts include hidden fees, false advertising, abusive overdraft policies and other deceptive practices that encourage consumers to open or change a bank account while not giving the customer all the important information about the bank account. Further issues with bank accounts can occur when the same type of bank account is withheld from certain groups of people or when not all consumers are made aware of all the services and benefits available to them.
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Overdraft Fees
Consumers have complained that they are being charged excessive overdraft fees for their bank accounts. Allegations have arisen that consumers were automatically enrolled in overdraft protection, without their knowledge, and were not warned before making a purchase that would put their account into overdraft.
Furthermore, they say that some banks have reordered transactions to ensure they make the maximum amount of money possible off overdraft fees and to ensure that customers go into overdraft. Overdraft fees can run as high as $35 per transaction. Some banks have now announced they are reviewing their overdraft policies.
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Prepaid Debit Cards
Companies that offer prepaid debit cards are accused of not adequately informing customers about all the fees associated with those cards. Customers say they were not told they could be charged activation fees, monthly fees, withdrawal fees, cash advance fees and even, in some cases, fees for talking to customer service representatives. According to reports, fees can run as high as $30 a month for the use of a prepaid debit card.
Furthermore, some customers say they have had difficulty accessing money deposited into their prepaid debit card account but are still being charged monthly fees for the use of the card.
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Credit Cards
 Although the new credit card responsibility act will go into effect in early 2010, there are still many complaints about credit card companies and their tactics. These include excessive rate hikes, overlimit fees, fees for not carrying a high enough balance, credit limit reductions and unfair termination of credit cards. Some credit card issuers are accused of using all these tactics to maximize profits just before the Credit CARD (Card Accountability, Responsibility and Disclosure) Act takes effect.
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Mortgages and Home Equity Loans
 Homeowners allege they were misled when it came to their mortgages. Some say they were charged excessive fees for their mortgages while others say their home was appraised at higher than what it should have been to help close the loan. Still others say they were encouraged to lie on their mortgage application to ensure the mortgage was approved.
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HELOC
Some customers who have a HELOC (home equity line of credit) account were informed that their credit line was being decreased, frozen or terminated. However, these customers say this action was taken even though they had good credit and paid their accounts as agreed, a violation of their contracts with the HELOC lender. A pending class action lawsuit has been filed against SunTrust, alleging the company violated its contracts in taking these actions. The lawsuit further alleges that SunTrust did so to enhance its financial condition.
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CONSUMER BANKING ARTICLES AND INTERVIEWS
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Another Bank Overdraft Fees Lawsuit Filed
Salt Lake City, UT: Customers upset over excessive bank overdraft fees have filed another lawsuit, this one against Zions Bank, alleging excessive bank fees. According to reports, bank customers claim the bank overdraft fees policy forced customers into overdraft more quickly than they should have, resulting in high profits from overdraft fees...
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Utah Bank Sued Over Excessive Overdraft Fees
Salt Lake City, UT: A group of angry customers has filed a lawsuit against Zions Bank in Utah, as the class-action group is protesting the institution's implementation of excessive overdraft fees, The Associated Press reported...
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Consumer Advocate Groups Lament Excessive Bank Overdraft Fees
Boca Raton, FL: Despite the fact that the issue was addressed by Congress last year, a number of consumer advocate groups are up in arms again over excessive bank overdraft fees, according to the Sun-Sentinel...
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