The Truth in Lending Act (TILA) is a law enacted by Congress to guarantee the accurate and meaningful disclosure of the costs of consumer credit (for example, new or used car loans). By providing consumers with full information of what a loan will actually cost, consumers have the ability to make better and more informed choices in the credit marketplace.
Prior to the enactment of the Truth in Lending Act, consumers had no easy way to determine how much a particular loan would cost over the life of the loan (examples: 30-year mortgage or 5-year car loan), or how to compare various financial options among different creditors. In fact, creditors did not use a uniform way of calculating interest, or a single system for defining what additional charges would be included in the interest rate. The Truth in Lending Act was designed to remedy this confusion.
For example, a $20,000 5-year new car loan with an interest rate of 4.00% at the dealer might actually cost more over the life of a loan than a $20,000 5-year new car loan with an interest rate of 7.00% at a credit union. Due to TILA, a lending institution must disclose all final costs related to the loan and how the loan’s interest is calculated.
Frequently, after trouble arises, many of the our clients in New York come to see us here at The Law Offices of Jason A. Shear. For example, our clients may have had a problem with the goods or services purchased on credit, and/or they may have experienced an unexpected financial crisis which led to default. In events such as these, our understanding of Truth in Lending laws serve a dual purpose to assist our clients and alleviate their difficulties.If lenders, such as banks or financial institutions, violate laws regarding the
If lenders, such as banks or financial institutions, violate laws regarding the Truth in Lending Act, you can be entitled to significant remedies, including, in some transactions, the right of rescission. Furthermore, the required TIL disclosures can help us parse a transaction to see if there are other viable claims.
A violation of specified provisions of the Truth in Lending Act gives the consumer the right to:
- Collect statutory damages for certain violations (calculated in many cases as double the finance charge, with, at least some cases, a minimum of $100 or $200 and a maximum of $1,000 or $2,000) without having to prove actual damages;
- Collect actual damages without any cap;
- Recover costs and reasonable attorney fees; and
- File class actions.
If you believe that a lender has violated the Truth in Lending Act, e-mail or give TILA attorney Jason A. Shear, Esq. a call at (716) 566-8988 to discuss your options.