USC 15 Section 1662(b): Your Rights Against Deceptive Lending Ads

The federal government protects consumers who borrow money on credit. USC 15 Section 1662(b) shields you from creditors making false claims about consumer credit.

Understanding your rights under this law protects you from dodgy lenders. You deserve honest advertising when seeking credit options.

What USC 15 Section 1662(b) Actually Says

USC 15 Section 1662(b) is part of the Truth in Lending Act, first enacted in 1968. The law has been amended multiple times for additional consumer protections.

You don’t need to memorize the entire Truth in Lending Act. Knowing your rights helps you spot the difference between legitimate and predatory lenders.

The law states that no advertisement for consumer credit may:

• Promise a specific periodic credit amount or installment arrangement unless the creditor customarily arranges such terms
• Require a specified down payment unless the creditor usually arranges down payments in that amount

Lenders cannot mislead you through deceptive advertising about credit terms or down payments.

Many creditors do require down payments before extending credit. Most mortgages require down payments, and some car loans do too.

The law allows exceptions when down payments and installment arrangements are standard business practice. Our partner Solo can help if you’ve been misled by a creditor’s false advertising.

Real-World Example: Legal Advertising

Tony sees a TV commercial for a payday loan company. The ad promises $1,000 in credit to people who apply.

Borrowers must have a job and agree to repay within one month. The payday loan company regularly grants $1,000 loans as its primary business.

Tony applies for the payday loan and meets all requirements. He receives $1,000, which he agrees to repay on his next paycheck.

The payday loan company complies with USC 15 Section 1662(b). Offering set loan amounts is customary for their business model. Their advertisements are legal.

Real-World Example: Illegal Advertising

Alexandra hears a radio ad for a furniture company. The ad says clients can obtain a $2,000 loan with a $200 down payment.

The furniture company doesn’t typically offer loans. Instead, it relies on outside creditors for financing options.

Alexandra needs a new bed and visits the furniture store. She pays the $200 down payment and receives a $2,000 loan.

The loan isn’t underwritten by a professional consumer lending company. The furniture company violated the law because loans aren’t customary for their business.

Why This Law Matters to You

USC 15 Section 1662(b) might seem technical at first glance. But the law serves critical consumer protection purposes.

The promise of small down payments for extensive credit attracts vulnerable customers. These consumers may not qualify for financing through traditional, regulated channels.

Believing they’ll gain access to ongoing periodic credit, clients may overextend themselves. They fall deep into debt due to misleading advertising promises.

USC 15 Section 1662(b) protects you from predatory lenders who weaponize advertising. These unscrupulous companies use deceptive tactics to trap people in debt cycles.

If you see an ad promising credit for a down payment, investigate carefully. Check whether such lending is customary for that particular organization.

Penalties for Violating This Law Are Severe

The Federal Trade Commission (FTC) enforces USC 15 Section 1662(b). Consumers deceived by illegal advertisements may qualify for contract rescission.

You should file a complaint with the FTC against the offending company. The FTC will investigate your complaint and determine appropriate enforcement actions.

Sometimes the company may be ordered to stop lending activities completely. The company may also face substantial fines and penalties for violations.

If you’re the victim of a USC 15 Section 1662(b) violation, act quickly. File your FTC complaint and consider consulting with an attorney about your options.

Watch Out for Fast Cash Promises

Some lenders use unscrupulous tactics to attract clients with poor credit. They target people who need credit but struggle qualifying through traditional banks.

These companies may use bogus credit opportunities to drum up business. They exploit vulnerable consumers who desperately need financial help.

Review all loan terms and conditions carefully before signing anything. Most lenders charge interest unless you qualify for a no-interest promotional period.

Ads promising specific credit amounts may violate federal law. Report suspicious advertisements to the FTC for further investigation and enforcement.

Settle Your Debts From Predatory Lending

You still have options if predatory lending led to a lawsuit. Debt settlement resolves your debt and helps you avoid court proceedings.

When you settle, you offer the creditor a lump-sum payment. The creditor agrees to release you from the remaining balance completely.

Debt settlement benefits both creditors and consumers equally. The creditor receives partial payment without court costs or garnishment paperwork.

You avoid court and put the debt behind you permanently. The creditor cannot start another lawsuit against you for the same debt.

Our partner Solo makes it easy to negotiate and settle debts online. The streamlined process simplifies resolving your debt without attorney fees.