Skip Stephens recently graduated from college with a degree I business administration. While attending college, Skip built up a large amount of debt, which currently includes student loans, outstanding credit card balances, bank loans, and so forth. Now that he has a good$-$paying job, Skip wants to clean up his debt position to improve his credit reputation so that he can qualify for a mortgage when he is ready to purchase a house in a few years.

As a result of a conversation with a financial planner, Skip decided that he should consolidate his debt into a single loan. Consolidation will help him monitor his debt better as he pays it off, and such an action probably will also decrease the interest rate that he is now paying. It took some effort, but Skip was able to find a financial institution that seems willing to offer him the type of loan he needs. The firm, which is named Syndicated Lending, is a new firm that specializes in loans to riskier borrowers, so it appears to be the right fit for Skip. Much of Syndicated$$s business is conducted electronically via the Internet. Although the company has a Website that gives some information about loans that Syndicated offers, there is not much information about interest rates, application fees, and other charges associated with getting a loan. When Skip clicked on the $$Interest Rate$$ icon on Syndicated$$s Website, a message appeared that said to contact the company directly. After many attempts, Skip was able to speak to a $$real$$ person at Syndicated. When he asked why more information was not available on the Website, the employee stated that the company decided not to post interest rates because managers believed it was unfair to publicize low rates to lure customers, knowing that most borrowers are unable to qualify for such loans. In other words, managers felt that it was unethical to use the $$bait and switch$1$ tactics used by competitors. The employee gave Skip some general information about the loans that Syndicated offers, but she would not tell him interest rates because the company had a policy of not quoting a rate until a thorough credit check was completed. As a result, to get an interest quote, Skip would have to fill out and submit a loan application and he would have to pay a $$100$ application$/$credit check fee.

Skip decided that he wanted more information about Syndicated before deciding whether to apply for a loan, so he talked with people in the local area, searched chat boards and consumer opinion Websites on the Internet, and so forth. Although much of the information he collected was positive, many people complained that Syndicated was a $$shady$$ organization that has a reputation of changing interest rates without notice and that it is not a customer$-$friendly firm. Some of the people whom Skip talked with went so far as to call Syndicated an unethical $$loan shark$$ that could get away with unannounced interest rate hikes and other changes in loan agreements because the company knows that its customers cannot borrow from any other financial institution in the local area.

Now Skip is wondering whether it is wise to apply for a consolidated loan from Syndicated, even though it appears that he can improve his credit rating and lower his interest payments. What should Skip do$?$ Does it seem as though Syndicated follows unethical lending practices? Is it unethical to use $$bait and switch$$ tactics like those that Syndicated accuses other institutions of using? Should interest rates be posted on the company$$s Website?

$1$A firm uses a $$bait and switch$$ practice when it advertises a product at a price that it doesn$$t intend to honor; rather, the company plans to sell either the same product or something else at a higher price.