Consumer complaint received 2023-01-02
Product: Vehicle loan or lease — Loan
Issue: Getting a loan or lease — Fraudulent loan
Company: ALLY FINANCIAL INC. (PA)

XXXX XXXX XXXX According to the TILA, before a consumer enters into a vehicle loan contract, their creditor must provide them with a Truth in Lending disclosure that contains specific information about the loan. While the TILA requires for disclosures regarding a loan to be made, the law does not tell creditors whether they are obligated to offer a loan to a borrower or how much interest they should charge ( i.e. the TILA does not contain any regulations that place limitations on charges, fees, etc. ). Rather, the TILA is meant to provide information and transparency to consumers so that they can make informed decisions regarding crediting options. The disclosure requirement of the TILA deters automotive related creditors from luring consumers with appealing financing offers that end up containing hidden fees and costs. Many automobile dealers and creditors violate the TILA by hiding or disguising charges that should have been clearly written out in the disclosure. 

The law standardizes the way that these disclosures are presented creditors are required to use the same terminology and expression of rates in all of their notices. The Truth in Lending disclosure must provide a consumer with information regarding important terms of credit. For example, auto dealers and creditors must include the following information in their disclosures : The annual percentage rate ( or APR ), which is the rate of interest that a consumer will be charged for the loan over the course of a year ; and The finance charge, which is the consumers cost of borrowing the loan and is comprised of the total amount of interest and any fees that may be charged ; and The amount financed, which is the amount of credit that the consumer is borrowing ; and The total cost of the loan, which is the sum of all the payments that a consumer will have made over the lifetime of the loan and is comprised of both the repayment of the principal amount and the finance charges ; and The total number of payments ; and The amount of each monthly payment ; and The penalty amount for any late fees or charges. 
The information in the disclosure must be presented in a clear and conspicuous way. The creditor must give the consumer the disclosure notice before the consumer takes on the obligation of purchasing the vehicle on credit ( i.e. before the consumer signs the loan contract ). It is possible that the loan contract or the retail installment sales contract will contain the necessary TILA disclosures. If this is the case, the creditor will be in compliance with TILA as long as they give a copy of the contract to the consumer for reviewing purposes. If a consumer does not choose to purchase a vehicle on credit, the creditor is not required to provide a TILA disclosure. By receiving TILA disclosures from auto creditors, consumers are afforded the ability to compare the terms of different loans from different creditors. This way, consumers are able to pursue the loan that best fits their needs. 

If an automobile related creditor violates the regulations of the TILA, the injured consumer has the right to take legal action against the creditor. Under the TILA, consumers are provided with a private right of action and they can bring either an individual or a class action lawsuit against an offending creditor.