Criticism
The main criticism among mainstream consumers has been that risk-based pricing can make 'shopping' for the best interest rates much more difficult. It is almost impossible to tell at first glance if one can be qualified to get an advertised rate or exactly what interest rate they qualify for at all. Consumer-rights advocates also believe that risk-based pricing in the extreme, especially in the form of predatory lending, hurts financially disadvantaged and vulnerable consumers by cutting them off from reasonably affordable capital and exposing them unwittingly to soaring interest rates and unsustainable financing schemes that erode equity and may lead to default. Risk-based pricing can be manipulated to wield deceptive marketing practices, such as the bait and switch. The fairness of similar lending practices within the mortgage industry is being investigated by the United States Congress. Some supporters of risk based pricing have suggested that it should be accompanied by heightened disclosure and transparency requirements and standardization of loan terms to facilitate comparison shopping and ameliorate these problems.
Read more about this topic: Risk-based Pricing
Famous quotes containing the word criticism:
“It is the will of God that we must have critics, and missionaries, and Congressmen, and humorists, and we must bear the burden. Meantime, I seem to have been drifting into criticism myself. But that is nothing. At the worst, criticism is nothing more than a crime, and I am not unused to that.”
—Mark Twain [Samuel Langhorne Clemens] (1835–1910)
“The critic lives at second hand. He writes about. The poem, the novel, or the play must be given to him; criticism exists by the grace of other men’s genius. By virtue of style, criticism can itself become literature. But usually this occurs only when the writer is acting as critic of his own work or as outrider to his own poetics, when the criticism of Coleridge is work in progress or that of T.S. Eliot propaganda.”
—George Steiner (b. 1929)
“However intense my experience, I am conscious of the presence and criticism of a part of me, which, as it were, is not a part of me, but a spectator, sharing no experience, but taking note of it, and that is no more I than it is you. When the play, it may be the tragedy, of life is over, the spectator goes his way. It was a kind of fiction, a work of the imagination only, so far as he was concerned.”
—Henry David Thoreau (1817–1862)