TILA ViolationCredit Repair Definition
A failure by a creditor to comply with the disclosure requirements of the Truth in Lending Act.
Definition
A TILA violation occurs when a creditor fails to adhere to the requirements set forth in the federal Truth in Lending Act (TILA). TILA mandates specific, clear disclosures about the terms and costs of consumer credit, including the Annual Percentage Rate (APR), finance charge, amount financed, total payments, and payment schedule. Violations can include: failing to provide required disclosures accurately or timely, using incorrect calculations for APR or finance charges, failing to provide notice of the right of rescission for applicable loans, or engaging in prohibited advertising practices. Consumers who experience TILA violations may be entitled to legal remedies, including actual damages, statutory damages, attorney fees, and, in some cases (like certain mortgage violations), an extended right to rescind the loan.
Frequently Asked Questions
What are common examples of TILA violations?
Common violations include: inaccurate calculation or disclosure of the APR or finance charge, failure to provide the TILA disclosure form within the required timeframe, omitting key terms from the disclosure, failing to properly notify borrowers of their 3-day right of rescission on eligible home-secured loans, and misleading advertising about credit terms.
What remedies are available for TILA violations?
Remedies can include: actual damages (any financial harm suffered due to the violation), statutory damages (a penalty amount set by law, which varies depending on the type of loan and violation, often up to certain limits), court costs, and reasonable attorney's fees. For certain significant violations related to home-secured loans, the borrower may also have an extended right to rescind the transaction (cancel the loan).
Is there a time limit to sue for a TILA violation?
Yes, TILA has statutes of limitations. Generally, lawsuits seeking monetary damages must be filed within one year from the date of the violation. However, the right to rescind certain mortgage loans due to disclosure failures can extend up to three years after the loan closing.
Related Terms
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