Like any legally binding document, it’s critical to understand the terms of a loan before you bind yourself to it. However, when the creditor reveals hidden fees or misrepresents the conditions of the loan, it can be incredibly upsetting, as you may not have agreed to it had you known the truth. As such, the Truth in Lending Act was created to help protect the best interests of consumers. However, if you believe that you are a victim of Truth in Lending Act violations, understanding your legal rights is critical. The following blog explores what you should know about these matters, including the importance of working with an Arroyo Grande consumer lawyer to explore your legal options.
What Is the Truth in Lending Act, and What Violations Are Common?
The Truth in Lending Act (TILA) is a federal law enacted to ensure that creditors and lenders provide full transparency to consumers regarding the true cost of loans. Unfortunately, prior to the creation of this act, many lenders were using unfair, manipulative, and deceitful methods to trick consumers into agreeing to loans without knowing the full terms and conditions while hiding fees. However, the TILA requires that all lenders fully disclose all terms and conditions, annual percentage rates, late fees, payment schedules, number of payments, and financing charges, among others.
Not only does this help ensure consumers are fully aware of the true cost of a loan before agreeing to the contract, but it also allows consumers to shop for loans by comparing offers from various companies. This helps promote a fair market by keeping prices competitive for consumers. Finally, this act allows consumers the right to rescind their contract within three business days.
Despite the enactment of this law, creditors and lenders still find ways to violate the rights of consumers. As such, familiarizing yourself with common violations is key to ensure you can seek justice if you are taken advantage of. Frequent violations include the following:
- Failing to disclose all terms and conditions of the loan
- Hiding fees
- Lying about loan terms
- Pressuring consumers into signing
- Violating unfair billing laws
- Refinancing loans with no benefit for the consumer, for the creditor’s gain
- Targeting vulnerable borrowers
- Using different criteria to screen and select borrowers
What Should I Do if My Rights Are Violated?
If you believe your rights under the Truth in Lending Act have been violated, it’s critical to understand the steps you must take. First and foremost, you should document all violations immediately. This can help serve as important evidence in the event you pursue compensation.
Next, you should connect with an experienced attorney who can help you file a claim against the predatory lender. It’s imperative to understand that you are entitled to both economic damages, meaning the actual monetary losses you’ve suffered because of the violation, as well as statutory damages. For TILA violations, the statutory damages are generally double the amount of the economic damages, but not less than $400 or more than $4,000.
As you can see, damages from TILA violations can be incredibly frustrating and difficult to pursue on your own. That is why working with an experienced attorney with Loker Law, APC is in your best interest. Our dedicated legal team will do everything possible to help guide you through these difficult times to fight for the justice and compensation you deserve. If your rights have been violated, do not hesitate to contact our firm today to learn how we can fight for you.
