What is the "bait & switch" technique?

By Investopedia Staff AAA
A:

The bait and switch is a advertising technique which can be considered illegal, but in most cases is merely looked upon as dishonest. In a typical bait and switch, a business will advertise prices or rates which are exceptionally low in order to garner attention and motivate customers to inquire. Once the unsuspecting customers arrive at the business, the salesman or business owner will inform customers that the advertised price is no longer available, or that the customers do not meet the requirements to qualify for the advertised price. The salesman or owner will then attempt to sell the customers a product or service which is more expensive as a substitute for the advertised product or service.

The bait and switch has gained the dubious distinction in the mortgage sector, where it may be common place for mortgage providers to advertise unbelievably low rates that for which the vast majority of applicants would not qualify, thus forcing customers to settle for less-desirable rates. (To learn more, see Homeowners, Beware These Scams!)

This question was answered by Lovey Grewal.

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