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Reckless Lending

Any credit provider that gives credit without considering whether a client can afford to repay the loan, may be guilty of reckless lending. There could be severe penalties and the credit provider may even lose the right to recover the debt.

A consumer will not be protected if they did not answer questions fully and honestly in the loan application process, for example, about existing debts and expenses. In such cases the credit grantor will not be guilty of reckless lending.