Bankrate.com, one of the premier internet sites for mortgage, HELOC, home equity and personal finance information, faces a lawsuit from a former advertiser that accuses the company of allowing “bait and switch” loan advertising on its site. The lawsuit, begun in 2002, is coming to trial this fall.

According to the suit, customers clicking through loan advertisements on Bankrate.com often cannot get the advertised rates or fees on their loans. Instead, lenders’ actual quotes to customers can be higher than what they advertised on the site.

Bankrate responds that the number of complaints it receives represents only a “tiny fraction” of the 40 million visitors who visit the site each year. Moreover, the company says that when it does receive a complaint about a lender not honoring advertised rates, it uses Bankrate employees posing as customers to check the offers out. According to a recent Wall Street Journal story:

If the lender fails that test, Bankrate says, it will temporarily suspend the lender from advertising on the site. “It’s a pretty onerous policy and we bounce dozens of people a month,” Mr. Evans, the (Bankrate) CEO says.”

Temporarily suspend? Dozens of people a month? It certainly doesn’t sound like Bankrate employs anything approaching a zero-tolerance policy. More will be learned about this case as court proceedings unfold, but the lesson to consumers is clear: the internet is a great tool to gather information and shop for the best loan deals, but it is also a largely unregulated marketplace and consumers, even more so than in the offline world, cannot let down their guard.

Technorati Tags: Bankrate.com, mortgage, HELOC, home equity, personal finance information