An internet user has sparked discussion after alleging that he caught a Nissan dealership violating the Truth in Lending Act.
In a video with over 149,000 views, TikTok user Mike (@alwaystouchingmoney_inc) shows himself interacting with a worker at United Nissan in Las Vegas, Nevada. The worker is in the process of telling him that they will not be doing business with him, while Mike is accusing the worker of committing securities fraud.
It’s unclear what’s happening here, though Mike attempts to elaborate in the description.
“They’re violating the truth in lending act mixing a cash & credit payment for a consumer transaction! It’s literally securities fraud!” he exclaims. “If they request a down payment it has ti be included within the finanxe charge! Referring to 15 USC Section 1605.”
Is the TikToker correct?
So, did Mike really catch this worker committing securities fraud or violating the Truth in Lending Act?
In short, no.
For context, “the Truth in Lending Act (TILA) protects you against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans,” per the Office of the Comptroller of the Currency.
The TILA mandates that the finance charge—”the real interest, fees, taxes, and other costs paid during the life of a car loan are referred to as the financing charge,” per J.D. Power—includes any cost that the borrower has to pay, either directly or indirectly, as a condition of getting the loan.
However, a down payment is not typically included in the finance charge. Instead, it’s a separate component of the transaction that will reduce the amount being financed rather than being considered part of the finance charge by itself.
It is also a misstatement to say that mixing credit and cash is illegal or constitutes securities fraud. Transactions for auto loans can involve both cash for a down payment, and credit for financing the remainder.
@alwaystouchingmoney_inc These dudes are crooks & con-artist at this dealership they’re violating the truth in lending act mixing a cash & credit payment for a consumer transaction! It’s literally securities fraud! If they request a down payment it has ti be included within the finanxe charge! Referring to 15 USC Section 1605 #fraud #truthinlending #act #consumer #transaction #violation #conartist #dealership #payment #funds #securties #withoutrecourse #car #bankfraud ♬ original sound – Mike
What does 15 USC Section 1605 actually say?
With regards to 15 U.S.C. 1605, which the TikToker calls out by name, his claim about its contents appears to be sourced from a viral misunderstanding about the Truth in Lending Act.
For example, the idea that car down payments are illegal under the Truth in Lending Act was referenced on Reddit two years ago, and videos on the topic were circulating on TikTok throughout last year
However, this section defines the finance charge and specifies what must be included in the finance charge. While it covers a wide range of costs, it does not generally mandate that down payments be included in the finance charge, making its relevance to the discussion of down payments questionable.
Mike, the TikToker who posted this video, has made several other videos on the topic going back months, and has previously made videos in which he references several topics commonly mentioned by sovereign citizens.
“Sovereign citizens are an anti-government group that believes that the United States is not legitimate, or that the laws apply to them,” Dr. Christina Sarteschi, a professor at Chatham University, told WPXI in August 2023.
Commenters offer their thoughts
In the comments section, users noted the ways in which Mike was incorrect.
“So if a bank approves you for 10k on a 15k car. you have 2 options, pay the 5k to the dealer and finance the rest, or get your chevrolegs moving and walk home,” observed a commenter.
“Downpayment is not fraud. Attaching the interest to downpayment instead of excluding would be fraud. I don’t think that’s the case in this video,” shared another.
“That dealership could and should file a complaint and charges,” stated a third.
The Daily Dot reached out to United Nissan via website contact form and Mike via email.
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