A radio script promises "just 5% down on your new home" and moves straight to the phone number. What does the script have to add?

Correct Answer

C) Disclose required terms when a trigger term is used

Why this is correct: The Truth in Lending Act (TILA) advertising rules require that advertisements for credit be truthful and not misleading. A core requirement is that if a specific "trigger term" (like a payment amount, down payment, or finance charge) is advertised, then certain other required disclosures, such as the Annual Percentage Rate (APR), must also be clearly and conspicuously stated. The correct action is to ensure all required disclosures are made when a trigger term is used, which aligns with the original explanation's anchor that advertisements must include required APR or trigger-term disclosures. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because internal company policies cannot override or create exceptions to mandatory federal disclosure laws like TILA. "Resolve the TILA Advertising Requirements issue with the reverse-mortgage occupancy exception that does not fit the facts" is wrong because applying an irrelevant exception (one for reverse mortgages) to a general advertising issue is incorrect and does not address the core disclosure requirement. "Rely on oral agreement when the rule requires documented compliance" is wrong because TILA advertising rules require disclosures to be in writing within the advertisement itself; oral agreements do not satisfy this documented compliance requirement. Exam tip: For TILA advertising questions, remember the key linkage: using a trigger term automatically triggers the duty to disclose other required terms like the APR.