Who is responsible for the effects of teaser loans?

Both lenders and borrowers can be seen as responsible for the effects of teaser loans. However, the answer to this question is subjective. Depending on one's political views, one may think either that those who distribute teaser loans are responsible for not ensuring borrowers' inability to repay them, or that borrowers are responsible for their failure to repay these loans.

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This is a highly subjective question, and your response will depend on your political views. In broad terms, do you think we are responsible for our own actions and should have to face the consequences, or that society has a duty to protect the vulnerable from being exploited? Your general view on this subject will determine what you think about a myriad of specific cases.

For instance, cigarettes have been aggressively marketed for many decades to make them appear exciting and sophisticated. There is, however, plenty of information, even on the packaging itself, about their harmful effects. If a person starts smoking and becomes addicted, does the blame lie with that person, the tobacco industry, or some combination of the two?

In the case of teaser loans, lenders offer a low rate of interest for a period of months or, in the case of long-term loans, perhaps a year or more. Inevitably, some borrowers attracted by the low initial rate will not have thought about how they will continue to pay the loan when the interest rises. Conservatives will tend to believe that these people have been foolishly improvident and that any effects they suffer are their own fault. Liberals will be more likely to say that a responsible lender should have performed due diligence to ensure that the borrower could repay.

Whatever your political persuasion, it seems reasonable to say that both parties are to some degree responsible for any negative effects. It is also clear that the less aggressively lenders market their loans, and the more responsible they are in vetting potential customers, the less responsibility they bear for the effects.

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