Predatory Practices

Predatory Practices are any practices or services that benefits a business or other entity at the expense of a poor or less powerful person. Predatory Practices often take advantage of poor people and perpetuate cycles of poverty.

Common Predatory Practices

High tax preparation fees

No access to free or low-cost banking

High check cashing fees

Other unfair fees and rates

Setting borrowers up for failure

How is This Connected to EITC and Tax Policy?

Research shows that the Earned Income Tax Credit (EITC) provides work, income, educational, and health benefits to its recipients and their children.  Recent research indicates the income from these tax credits leads to benefits at virtually every stage of life. In addition, tax credits can be a tool to advance equity.

When families are victims of predatory practices,

  • Scarce dollars become scarcer and families have less money to make ends meet
  • Businesses and other entities gain wealth at the expense of poor people
  • Quality of life issues including health, living conditions and opportunities for joy are negatively impacted
  • A system of inequity becomes more inequitable
  • Helping families recover becomes more and more expensive
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