Start My Answer
loading...

USC 15 Section 1662(b) Explained

Sarah Edwards | July 17, 2023

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Harris is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: USC 15 Section 1662(b) is part of the Truth in Lending Act, which is regulated by the Federal Trade Commission. In this article, SoloSuit explains what you need to know about the law and how it impacts consumer credit.

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.

Settle with SoloSettle

Make an Offer

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.

Example: Tony sees a commercial on TV for a payday loan company that says it will grant $1,000 in credit to people who apply. To qualify, the borrower must have a job and agree to repay the loan within one month. The payday loan company regularly grants $1,000 loans to borrowers, and doing so is its primary form of business. Tony decides to apply for the payday loan and meets the requirements. He receives $1,000, which he agrees to repay on his next paycheck. In this case, the payday loan company is in compliance with USC 15 Section 1662(b) since it is customary for the business to offer set loan amounts. Its advertisements are legal.


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

Example: Alexandra hears a radio ad for a furniture company. The furniture company says that clients can obtain a loan for $2,000 to use on mattresses or sofas if they pay a $200 down payment. The furniture company doesn’t typically offer loans; instead, it relies on outside creditors for financing. Alexandra needs a new bed, so she visits the furniture company to take advantage of the loan. Once she pays the $200, she is granted a $2,000 loan. However, it is not underwritten by a professional consumer lending company. In this case, the furniture company is in the wrong. Since loans are not customary for the company, it can’t advertise that customers can make a down payment in exchange for credit.


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 Solo?

Solo makes it easy to resolve debt with 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.

SoloSettle can help you contact your debt collector or creditor and negotiate the debt to settle for less, all online. It simplifies and streamlines the process to settling your debt.

No matter where you find yourself in the debt collection process, Solo is here to help you resolve your debt.

>>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 all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

Guides on how to resolve debt with every debt collector

Are you being sued by a debt collector? We’re making guides on how to resolve debt with each one.

Resolve your debt with your creditor

Some creditors, banks, and lenders have an internal collections department. If they come after you for a debt, Solosuit can still help you respond and resolve the debt. Here’s a list of guides on how to resolve debt with different creditors.

Settle your medical debt

Having a health challenge is stressful, but dealing medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Get debt relief in your state

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt collection laws in all 50 states

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

Other wage garnishment resources

How to settle a debt in your state

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

How to settle with every debt collector

Not sure how to negotiate a debt settlement with a debt collector? We are creating guides to help you know how to start the settlement conversation and increase your chances of coming to an agreement with every debt collector.

Other debt settlement resources

Personal loan and debt relief reviews

We give a factual review of the following debt consolidation, debt settlement, and loan organizations and companies to help you make an informed decision before you take on a debt.

How to repair and improve your credit score

Debt has a big impact on your credit. Below is a list of guides on how to repair and improve your credit, even while managing major debt.

How to resolve student loan debt

Struggling with student debt? SoloSuit’s got you covered. Below are resources on handling student loan debt.

Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

Get answers to these FAQs on debt collection

How-to debt guides

Learn more with these additional debt resources

It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.


"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather



Get Started

Contents