As a consumer, a considerable portion of your adult financial activities will include examining loan terms and comparing options to determine which one is the best for you. However, you should note that this wasn’t always the norm, as many lenders would not disclose the full terms and conditions, leaving consumers unable to shop for the best option. Luckily, this changed with the implementation of the Truth in Lending Act. If you’re unsure of the function of this federal law, you’ll want to keep reading. The following blog explores what you should know about common violations of the Truth in Lending Act and the steps you can take as a victim to protect yourself with the help of a California consumer lawyer.
What Is the Truth in Lending Act, and What Violations Occur Most?
The Truth in Lending Act (TILA) is a federal law enacted to ensure companies provide consumers with full transparency regarding the terms of their loans. This includes how much will be financed, the payment schedules, total payments, annual percentage rates, and late payment fees, among others. Generally, the purpose is to ensure that consumers are given standardized and clear information from all creditors and lenders.
Not only does the TILA allow consumers to understand the full cost of a loan before they agree, but this also allows consumers to shop for loans, preventing unfair and manipulative terms, while promoting competitive pricing among lenders. In addition, the TILA provides a rescission period, which gives consumers the opportunity to rescind the loan within three business days of signing the contract without penalties.
Despite the fact that this law is in place, many lenders and creditors still take advantage of consumers by violating the terms and conditions of the TILA. As such, it’s critical to familiarize yourself with the most common violations so you may best protect yourself. This includes, but is not limited to, the following:
- Concealing important terms and conditions about the loan
- Refusing to let a consumer rescind their loan
- Intentionally misleading or lying to consumers about loan terms
- Targeting certain types of clients and treating them differently
- Intentionally using pushy sales tactics on vulnerable borrowers
- Repeatedly refinancing the loan with no benefit to the consumer
- Hiding fees
What Can I Do if I am a Victim of a Violation?
If you are a victim of a Truth in Lending Act violation in California, it’s imperative to understand that you are generally entitled to compensation for the damages incurred as well as statutory damages. This means you can recover the value of the economic damages you’ve suffered as a result of the predatory lending, as well as statutory damages, which are limited to twice the financial damage, but no less than $400 and not exceeding $4,000. As such, if you believe you are a victim, you should capture evidence of the violation and contact an experienced consumer attorney.
At Los Angeles Legal Solutions, our firm understands how difficult navigating the lending world can be. However, we believe that companies that take advantage of consumers should be held liable for their deception. When you need help, contact our firm today to learn how we can assist you in fighting for the justice you deserve.
