USC 15 Section 1662(b) Explained

Sarah Edwards | July 17, 2023

Edited by Hannah Locklear

The federal government has a lot of protections in place for consumers who borrow money on credit. One is USC 15 Section 1662(b), which protects individuals from creditors who make certain claims about consumer credit.

Understanding your rights under USC 15 Section 1662(b) can protect you from dodgy lenders who try to separate you from your wallet.

Sued for debt? Settle your debts with the help of SoloSettle.

What USC 15 Section 1662(b) says

USC 15 Section 1662(b) is one small regulation among the hundreds that are part of the Truth in Lending Act, which was first enacted in 1968. Since then, it has been amended several times for additional consumer protections.

While most people don’t know the Truth in Lending Act word for word (after all, it’s pretty long), understanding your rights under the law can help you know the difference between an upstanding lender and one with bad intentions.

USC 15 Section 1662(b) relates to the advertisements that lenders use to attract customers. It states:

“No advertisement to aid, promote, or assist directly or indirectly any extension of consumer credit may state
(1) that a specific periodic consumer credit amount or installment amount can be arranged, unless the creditor usually and customarily arranges credit payments or installments for that period and in that amount.
(2) that a specified downpayment is required in connection with any extension of consumer credit, unless the creditor usually and customarily arranges downpayments in that amount.”

So in other words, under the law, lenders cannot mislead consumers through either of the following actions:

• Advertising that a consumer will receive a specific amount of credit or installment arrangement if they apply for a loan;
• Using advertisements to convey that borrowers must pay a down payment to access consumer credit.

Of course, many creditors require customers to make down payments before they extend credit. For example, most people will need to make a down payment to obtain a mortgage, and some may need to do so to buy a car.

Therefore, the law allows for exceptions if down payments and specific installment arrangements are customary and standard business practice for the lender.

To put this in perspective, let’s consider some examples of USC 15 Section 1662(b) in action.

Now, let's look at another example of a company that isn’t following the law so that you can see the difference.

Did you receive a collection notice from a collection agency you’re unfamiliar with? Make them validate the debt with SoloSuit’s Debt Answer Letter.

USC 15 Section 1662(b) is important to borrowers

At first glance, it may not be clear why USC 15 Section 1662(b) is important. After all, what’s so bad about requiring a down payment to get a useful loan? And why is advertising a specific amount of credit available during a period wrong?

The promise of a small down payment in exchange for an extensive line of credit can attract customers who may not be eligible for financing through other means. Similarly, if a client believes they’ll gain access to ongoing periodic credit, they may misuse the opportunity and fall deep into debt.

In this way, USC 15 Section 1662(b) protects consumers from predatory lenders who use advertising to get people in debt.

If you see an advertisement that promises credit in exchange for a down payment or that guarantees a certain amount of money after the application, it may run afoul of the Truth in Lending Act. Understanding the organization’s customary lending habits is essential to determine whether its actions are illegal.

The repercussions of violating USC 15 Section 1662(b) are severe for lenders

The Federal Trade Commission (FTC) can enforce the law if a company violates USC 15 Section 1662(b). Consumers who take out loans due to an ad they see or hear that promises a certain amount of credit or requires a down payment to receive credit may qualify for a rescission of the contract.

To start the process, the consumer should file a complaint with the FTC against the company. The FTC will investigate the complaint and decide on the appropriate actions. Sometimes, the company may be ordered to stop its lending activities altogether or face fines and penalties.

If you believe you’re the victim of a company that violated USC 15 Section 1662(b), file a complaint with the FTC. If the violation is severe, you may also consider talking with an attorney.

Be wary of lenders that promise fast cash

Sometimes, lenders use unscrupulous tactics to attract clients who need credit but have trouble qualifying for a loan through traditional banks. They may also use these bogus credit opportunities to drum up business in their industry.

Before taking out any loan, review the terms and conditions carefully. Remember that most lenders will charge interest for their loans unless you qualify for a no-interest period. If you see an ad that promises a certain amount of credit, it may be illegal, and you can report it to the FTC for further investigation.

Have you been sued for debt? Get them off your back with the help of SoloSettle.

Settle your debts for good

If you are being sued as a result of predatory lending, you still have options. Debt settlement is one way to resolve your debt and avoid going to court.

When you settle a debt, you offer the creditor a portion of the debt in a lump-sum payment. The creditor then agrees to release you from the remaining balance and drop the legal claim against you.

Debt settlement benefits both creditors and consumers. The creditor will receive part of the debt you owe without needing to go to court or fill out paperwork for a garnishment. You’ll also avoid court, and you’ll be able to put the debt behind you without fear that the creditor will start another lawsuit against you.

Want to settle your debts for good but aren't sure how to get started? Check out this video to learn more about the debt settlement process:

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

All 50 states.

• Alabama
• Alaska
• Arizona
• Arkansas
• California
• Colorado
• Connecticut
• Delaware
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Vermont
• Virginia
• Washington
• West Virginia
• Wisconsin
• Wyoming

Guides on how to beat every debt collector

Being sued by a different debt collector? Were making guides on how to beat each one.

• Absolute Resolutions Investments LLC
• Accredited Collection Services
• Alliance One
• Amcol Clmbia
• American Recovery Service
• Asset Acceptance LLC
• Asset Recovery Solutions
• Associated Credit Services
• Autovest LLC
• Cach LLC
• Cavalry SPV I LLC
• Cerastes LLC
• Colinfobur
• Covington Credit
• Crown Asset Management
• CTC Debt Collector
• Cypress Financial Recoveries
• Delanor Kemper & Associates
• Eagle Loan of Ohio
• Educap
• Estate Information Services
• FIA Card Services
• Forster & Garbus
• Freshview Solutions
• Fulton Friedman & Gullace LLP
• Harvest Credit Management
• Howard Lee Schiff
• Hudson & Keyse LLC
• Integras Capital Recovery LLC
• Javitch Block
• Jefferson Capital Systems LLC
• LVNV Funding
• Mannbracken
• Mariner Finance
• Medicredit
• Michael J Adams PC
• Michael J Scott
• Midland Funding LLC
• Mullooly, Jeffrey, Rooney & Flynn
• Mountain Land Collections
• MRS Associates
• National Collegiate Trust
• Nationstar Foreclosure
• Northstar Capital Acquisition
• NCEP LLC
• NRC Collection Agency
• OneMain Financial
• Palisades Collection LLC
• Pallida LLC
• Paragon Revenue Group
• Pinnacle Collections Agency
• PMAB LLC
• Portfolio Recovery Associates
• Provest Law
• PYOD LLC
• Reunion Student Loan Finance Corporation
• Revenue Group
• Regents and Associates
• RSIEH
• Salander Enterprises LLC
• Second Round Sub LLC
• Security Credit Services
• Sherman Financial Group
• Suttell and Hammer
• T-Mobile
• Transworld Systems
• Tulsa Teachers Credit Union
• UCB Collection
• Velo Law Office
• Velocity Investments
• Waypoint Resource Group
• Weinberg and Associates
• Wolpoff & Abramson

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

• Bank of America
• Capital One
• Chase
• Credit One Bank
• PayPal Synchrony Card
• SYNCB/PPEXTR
• Synchrony Bank
• Target National Bank
• Wells Fargo

Going to Court for Credit Card Debt — Key Tips

How to Negotiate Credit Card Debts

How to Settle a Credit Card Debt Lawsuit — Ultimate Guide

Get answers to these FAQs

Need more info on statutes of limitations? Read our 50-state guide.

Why do debt collectors block their phone numbers?

How long do debt collectors take to respond to debt validation letters?

What are the biggest debt collector companies in the US?

Is Zombie Debt Still a Problem in 2019?

SoloSuit FAQ

If a car is repossessed, do I still owe the debt?

Is Portfolio Recovery Associates Legit?

Is There a Judgment Against Me Without my Knowledge?

Should I File Bankruptcy Before or After a Judgment?

What is a default judgment?— What do I do?

Summoned to Court for Medical Bills — What Do I Do?

What Happens If Someone Sues You and You Have No Money?

What Happens If You Never Answer Debt Collectors?

What Happens When a Debt Is Sold to a Collection Agency

What is a Stipulated Judgment?

What is the Deadline for a Defendants Answer to Avoid a Default Judgment?

Can a Judgement Creditor Take my Car?

Can I Settle a Debt After Being Served?

Can I Stop Wage Garnishment?

Can You Appeal a Default Judgement?

Do I Need a Debt Collection Defense Attorney?

Do I Need a Payday Loans Lawyer?

Do student loans go away after 7 years? — Student Loan Debt Guide

Am I Responsible for My Spouses Medical Debt?

Should I Marry Someone With Debt?

Can a Debt Collector Leave a Voicemail?

How Does Debt Assignment Work?

What Happens If a Defendant Does Not Pay a Judgment?

How Does Debt Assignment Work?

Can You Serve Someone with a Collections Lawsuit at Their Work?

What Is a Warrant in Debt?

How Many Times Can a Judgment be Renewed in Oklahoma?

Can an Eviction Be Reversed?

Does Debt Consolidation Have Risks?

What Happens If You Avoid Getting Served Court Papers?

Does Student Debt Die With You?

Can Debt Collectors Call You at Work in Texas?

How Much Do You Have to Be in Debt to File for Chapter 7?

What Is the Statute of Limitations on Debt in Washington?

How Long Does a Judgment Last?

Can Private Disability Payments Be Garnished?

Can Debt Collectors Call From Local Numbers?

Does the Fair Credit Reporting Act Work in Florida?

The Truth: Should You Never Pay a Debt Collection Agency?

Should You Communicate with a Debt Collector in Writing or by Telephone?

Do I Need a Debt Negotiator?

What Happens After a Motion for Default Is Filed?

Can a Process Server Leave a Summons Taped to My Door?

Learn More With These Additional Resources:

Need help managing your finances? Check out these resources.

How to Make a Debt Validation Letter - The Ultimate Guide

How to Make a Motion to Compel Arbitration Without an Attorney

How to Stop Wage Garnishment — Everything You Need to Know

How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)

Defending Yourself in Court Against a Debt Collector

Tips on you can to file an FDCPA lawsuit against a debt collection agency

Advice on how to answer a summons for debt collection.

Effective strategies for how to get back on track after a debt lawsuit

New Hampshire Statute of Limitations on Debt

Sample Cease and Desist Letter Against Debt Collectors

The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah

West Virginia Statute of Limitations on Debt

What debt collectors cannot do — FDCPA explained

Defending Yourself in Court Against Debt Collector

How to Liquidate Debt

Arkansas Statute of Limitations on Debt

Youre Drowning in Debt — Heres How to Swim

Help! Im Being Sued by My Debt Collector

How to Make a Motion to Vacate Judgment

How to Answer Summons for Debt Collection in Vermont

North Dakota Statute of Limitations on Debt

ClearPoint Debt Management Review

Indiana Statute of Limitations on Debt

Oregon Eviction Laws - What They Say

CuraDebt Debt Settlement Review

How to Write a Re-Aging Debt Letter

How to Appear in Court by Phone

How to Use the Doctrine of Unclean Hands

Debt Consolidation in Eugene, Oregon

Summoned to Court for Medical Bills? What to Do Next

How to Make a Debt Settlement Agreement

Received a 3-Day Eviction Notice? Heres What to Do

How to Answer a Lawsuit for Debt Collection

Tips for Leaving the Country With Unpaid Credit Card Debt

Kansas Statute of Limitations on Debt Collection

How to File in Small Claims Court in Iowa

How to File a Civil Answer in Kings County Supreme Court

Roseland Associates Debt Consolidation Review

How to Stop a Garnishment

Debt Eraser Review

Do Debt Collectors Ever Give Up?

Can They Garnish Your Wages for Credit Card Debt?

How Often Do Credit Card Companies Sue for Non-Payment?

How Long Does a Judgement Last?

​​How Long Before a Creditor Can Garnish Wages?

How to Beat a Bill Collector in Court