If They Didn't Explain the Terms, That May Be Illegal

What the Truth in Lending Act Actually Requires

The Truth in Lending Act is a federal consumer protection law that requires lenders to disclose the true cost of credit before you sign. It applies to most consumer loans — mortgages, home equity lines, auto loans, personal loans, and credit cards. The law isn't about whether the loan terms were fair. It's about whether the lender gave you the information you needed to make an informed decision. If they didn't, TILA gives you legal remedies regardless of whether the underlying loan was otherwise valid.

Key disclosures lenders are required to provide under TILA:

• The annual percentage rate (APR), expressed clearly and accurately
• The total finance charge over the life of the loan
• The amount financed and the total amount you will have paid when the loan is complete
• The payment schedule, including number of payments, amounts, and due dates
• Any balloon payments, prepayment penalties, or variable rate terms

The Right of Rescission: You May Be Able to Cancel the Loan

One of the most powerful protections TILA provides is the right of rescission. If you used your home as collateral for a loan — a home equity loan, a home equity line of credit, or a refinance with a new lender — federal law gives you three business days after closing to cancel the transaction without penalty. The lender must notify you of this right in writing. If they failed to provide proper notice, your right of rescission may extend up to three years from the date the loan was made. That means you may be able to unwind a loan long after you signed it, return the financed amount, and recover the finance charges you've already paid.

When TILA Violations Result in Damages

Beyond rescission, TILA allows borrowers to sue lenders for statutory and actual damages when required disclosures are missing, inaccurate, or misleading. In a successful TILA claim, you may be entitled to:

• Actual damages — any financial harm caused by the lender's failure to disclose
• Statutory damages of up to $4,000 for individual claims (higher in class actions)
• Return of finance charges already paid
• Attorney fees and court costs paid by the lender

These remedies exist precisely because TILA violations often go undetected. Most borrowers don't know what disclosures they were supposed to receive, which means lenders who cut corners rarely face consequences unless a borrower works with an attorney who knows what to look for.

When MCA Agreements May Violate Disclosure Requirements

Merchant cash advance agreements occupy a legal gray area, and some lenders structure them specifically to avoid consumer lending regulations. However, when an MCA is structured in a way that functions as a true loan — with fixed repayment terms, defined interest equivalents, and personal guarantees — it may trigger TILA's disclosure requirements. If the funder failed to clearly disclose the effective cost of the advance, the total amount owed, or the repayment structure, there may be grounds for a TILA-based challenge.

Predatory Lending and Hidden Terms

TILA was designed with predatory lending in mind. Lenders who bury the real cost of credit in fine print, misstate the APR, or omit required disclosures aren't just being sloppy — they're violating federal law. We review loan documents and disclosure packets to identify whether your lender met its legal obligations. If they didn't, we build the claim from the paperwork they gave you.

Home Equity Loans and Refinances

TILA protections are especially significant for homeowners. If you refinanced your mortgage, took out a home equity loan, or opened a home equity line of credit and the lender failed to provide accurate disclosures or proper notice of your rescission rights, you may have a claim even if the loan has been active for years. We work with homeowners across Nassau County, Suffolk County, and the five boroughs to evaluate whether their lender complied with federal disclosure requirements.

What We Look for in Your Loan Documents

A TILA claim starts with the paperwork. We review your loan agreement, the Truth in Lending disclosure statement, the notice of right to rescind (if applicable), and any other documents provided at or before closing. Common violations we identify include:

• APR stated incorrectly or not stated at all
• Finance charges understated or omitted
• Missing or defective rescission notice on home-secured loans
• Failure to disclose variable rate terms or balloon payments
• Disclosures provided after signing rather than before