Triggering Term

A triggering term is a word or phrase that, when utilized in advertising writing, requires the introduction of the terms of a credit agreement. Triggering terms are intended to assist consumers with contrasting credit and lease offers on a fair and equivalent basis. Triggering terms are set and checked by the U.S. Federal Trade Commission (FTC).

Understanding Triggering Terms

Whether in print, broadcast, or online, credit advertising must submit to the Truth in Lending Act passed in 1969, which accommodates the enforcement of credit advertising standards. The rule shields consumers from predatory advertising and lending practices by guaranteeing the disclosure of consumer credit and lease terms.

Triggering terms assist with explaining the conditions under which a consumer is borrowing money. In the event that a promoter utilizes quite a few terms of a [credit agreement](/creditagreement, for example, how finance charges are processed, when a charge can be forced, and charges registered as an annual percentage rate, then, at that point, the ad must likewise contain certain predetermined disclosures. In short, certain terms — when used to bait clients — trigger extra disclosures.

Instances of Triggering Terms

Open-end and closed-end credit arrangements, as well as leases, each have a set of triggering terms associated with them. For instance, in the event that any of the following sample triggering terms are utilized in advertising, disclosures must be made:

The amount of a down payment communicated as a percentage or a dollar amount (model: "5% down" or "80% supporting")
The amount of any payment communicated as a percentage or a dollar amount (model: "$15 each month" or "regularly scheduled payments of under $100")
The number of payments (model: "60 regularly scheduled payments and no doubt about it" or "12 small payments is all you owe")
The total time required to pay and period of repayment (model: "5-year loans accessible" or "only 36 low regularly scheduled payments")
The finance charge amount (model: "Under $200 interest" or "supporting costs under $99")

In the event that any of the above term triggers are utilized, the following must be disclosed:

The amount or percentage of the down payment
The repayment terms
The annual percentage rate (APR); the term must be illuminated.
On the off chance that the APR can be raised after the credit is extended, then that fact must be disclosed.

Then again, a few terms or phrases don't trigger extra disclosures. Models incorporate, financing available, low or no down payment, easy regularly scheduled payments, pay weekly, and terms to accommodate your budget.

Triggering Terms Special Considerations

Carefully perusing disclosures can assist consumers with getting an accurate image of the cost of borrowing money; being unaware of the terms of a loan and the charges incurred can make a consumer pay more than they ought to for credit or become more obligated than they intended.

In the mean time, a way for credit companies to meet disclosure requirements is by utilizing genuine repayment models. For example, on the off chance that a mortgage lender is advertising a 5% down payment on loans, they could give a model that shows a 30-year fixed-rate loan, the repayment amounts, and the interest rate that was utilized at the hour of the commercial.

Features

Credit companies can frequently meet disclosure requirements by giving genuine numbers and repayment models.
The FTC directs what qualifies as a triggering term.
A triggering term is a word or phrase that, assuming utilized in credit advertising, requires extra credit agreement disclosures.
The purpose of triggering terms is to explain the terms of a loan or agreement and to offer consumers the chance to compare credit or lease offers.