Question 78

Only $500 per month requires full disclosure of credit terms.

The phrase "only $500 per month" is considered to be a triggering term under Regulation Z, meaning that it necessitates full disclosure of the credit terms associated with the offer. This regulation is designed to ensure that consumers are fully informed about the financial implications of their credit agreements.

A) no payment until June

The phrase "no payment until June" does not require full disclosure of credit terms because it does not specify a payment amount or terms that significantly affect the consumer's understanding of the credit arrangement. While it may imply a delay in payment, it lacks the specificity that triggers the need for detailed disclosures.

B) low down payment

The phrase "low down payment" is also not a triggering term under Regulation Z as it does not provide a specific amount or a clear financial obligation. It is a vague description that does not lead to the necessity for comprehensive disclosure of credit terms.

C) only $500 per month

This phrase explicitly states a monthly payment amount, which qualifies it as a triggering term under Regulation Z. Advertisements that include this language must provide full details regarding the credit terms to ensure consumers are adequately informed about their financial responsibilities.

D) no extra charges

The phrase "no extra charges" does not trigger the requirement for full disclosure of credit terms since it does not specify payment amounts or interest rates. This phrase may provide some assurance to consumers but does not constitute a direct financial obligation that would necessitate detailed disclosures.

Conclusion

The phrase "only $500 per month" is the only option that explicitly requires full disclosure of credit terms according to Regulation Z due to its specificity in outlining a payment obligation. Other options fail to meet the criteria for triggering terms as they lack clear monetary implications, thus exempting them from the requirement for comprehensive disclosure. Understanding these distinctions is crucial for compliant advertising practices in consumer credit.