USC 15 Section 1662(b) Explained

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.

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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:

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SoloSuit makes it easy to fight debt collectors.

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