As a consumer, a considerable part of your life is spent thinking about your finances and how to manage them to the best of your abilities. This often includes examining several different options when making big purchases or taking out loans. However, the information you’re provided regarding fees and loan terms wasn’t always required. Luckily, the Truth in Lending Act was introduced as a means of ensuring transparency for consumers. Unfortunately, however, you’ll find that despite this federal law, some companies still attempt to deceive customers. As such, the following blog explores the most common violations of the Truth in Lending Act so you can identify them and fight for the justice you deserve. In addition, you’ll learn the importance of working with a San Diego consumer lawyer to help you navigate these matters.
What Is the Truth in Lending Act, and What Violations Are Common?
The Truth in Lending Act (TILA) is a law created and enacted to help protect consumers from predatory contracts. Unfortunately, many companies, lenders, and financial institutions were concealing important terms and conditions, fees, and information regarding the transaction until after consumers had signed the legally binding document. As such, this law requires companies to provide all necessary information upfront so consumers understand the true cost of the loan they are agreeing to.
Additionally, this helps ensure that consumers can shop around for loans, encouraging a free and fair market with competitive prices. Aside from ensuring that consumers understand the full terms and conditions of a loan prior to signing a contract, you’ll find that this law also gives consumers the right to rescind their transaction for certain loans within three business days.
Despite the creation and enforcement of this law, you’ll find that companies can still violate this act. It’s important to understand what violations are most common so you can easily recognize if and when a company is trying to take advantage of you. The following are some of the most common violations:
- Failing to disclose the correct annual percentage rate
- Charging excessive fees
- Refusing to let a consumer rescind their transaction
- Continually refinancing a loan with no benefit for the consumer
- Misrepresenting the terms of the loan
- Pressuring consumers into signing documents
- Targeting certain types of consumers
- Changing the standards based on the borrower
What Should I Do if My Rights Were Violated?
In the event your rights are violated under the Truth in Lending Act, it’s important to understand your legal options. Typically, one of the most important things you can do is document the violation. This can help serve as important evidence in your legal battle against the predatory company.
Next, you should connect with an experienced consumer defense attorney to help you fight for justice. Trying to navigate these matters on your own can result in less than favorable outcomes, so ensuring you have someone familiar with these issues to represent you is critical.
It’s also important to understand that you are generally eligible for damages in accordance with the TILA. For example, you’ll find that you can recover any actual economic damages you’ve suffered as a result of the violations. In addition, you can recover statutory damages up to twice the amount of the damages you’ve incurred, but not less than $400 or exceeding $4,000.
