Product Liability

American Express may have violated the Truth in Lending Act, were you affected?

March 6, 2020

American Express may have violated the Truth in Lending Act by not properly disclosing information they are required to disclose. Were you affected?

We have recently become aware of a potential violation of the Truth in Lending Act (TILA) by American Express (AMEX) that affected thousands of American Express credit cardholders in August and September of 2019. Those that were credit card holders during this period could possibly receive a statutory award for the violation from $500 to $5,000.

What is the Truth and Lending Act?

TILA is an act that was put in place to protect consumers when borrowing money from institutions. Banks and other institutions must adhere to these guidelines to ensure that consumers are given the appropriate disclosures before lending money. This protects consumers from unfair lending practices when borrowing funds from a credit card, mortgage or home equity loan. Primarily, the act functions to guarantee suitable disclosure of terms and conditions that gives potential borrowers a certain level of transparency and allows them to compare different options between lenders.  

Some of the practices TILA protects consumers from are:

-         Requiring full disclosure of loan costs and terms

-         Creating the right of rescission (allowing creditors to back out from loans in a limited time)

-         Providing channels for alternative dispute resolution

-         Directing borrowers to put creditors on notice when their mortgage is reassigned

-         Placing caps on high-cost mortgages and some types of home equity lines of credit

-         Providing better protection for borrowers’ primary residences secured by loans

TILA has become more and more important since it was first enacted in 1968. With the rise of credit cards as a primary means of payment, making sure lenders are giving proper disclosure and adhering to established regulations is of utmost importance. While lenders do have a fair amount of autonomy in setting their terms, making them readily available can prevent them from deception and fraud.

While TILA establishes these regulations for lenders, when TILA is violated it can oftentimes go unnoticed by consumers. We were recently made aware of a possible violation of TILA concerning AMEX credit card holders during August and September of 2019. Looking into the violation, those affected by the failure to disclose may be eligible to recoup $500 to $5,000, plus attorney fees, without ever having to go to court. If you or someone you know had an AMEX credit card during this time, stay tuned as we will be providing additional information on this case in the future.

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