If a broker advertises "all credit accepted" and denies a borrower with poor credit, what are they guilty of?

The correct answer is based on the principle of accurate representation in advertising. When a broker claims "all credit accepted," they are making a clear and broad assertion that any individual, regardless of their creditworthiness, will be approved for a loan. If they subsequently deny a borrower with poor credit, it contradicts their advertising claim, leading to a situation of misrepresentation or misleading advertising.

False advertising is considered an unethical practice, as it can lead potential borrowers to believe they have a viable option when, in reality, they do not. This inconsistency between the claim made and the actions taken can legally and ethically be considered false advertising, which undermines the trust essential to the borrowing process.

In this situation, other terms like redlining — which refers specifically to discriminatory practices based on geographic areas rather than individual credit factors — or steering — which involves directing a borrower towards or away from specific loan products based on protected characteristics — do not appropriately address the core issue of misleading representation regarding the acceptance of credit. While those terms pertain to other forms of discrimination or unethical practices in lending, they do not directly align with the scenario of advertising "all credit accepted" and then denying applicants based on their credit history.