Contract chicanery is the unethical business practice of stealthily inserting provisions into a loan contract that are severely unfavorable to the borrower.
This is the biggest scary nightmare that cause borrowers to jump up from bed at night screaming in horror.
For example, a lot of borrowers often get a surprise when finding out about an annual fee charged to their accounts, charged for having average account balances fall below a certain range, be charged higher interest rates all of a sudden.
Any material term of a contract should be acknowledged and understood by a borrower.
Contract chicanery is one of the reasons there is predatory lending. It is also a reason why lenders prefer to use their own real estate attorneys or entice borrowers to use one of those in their approved panel of law firms.
In the past when there was not enough legislation to regulating lending activities, customers fully expect lenders to leave out informing them from crucial points contained in a contract.
But it is important to differentiate between what is a genuine mistake and what is a genuine attempt to cheat.
While the Truth in Lending Act addressed a lot of issues that deter contract chicanery, there are still loopholes and oversights that allow predators to stalk their prey.