What is a "trigger term" in advertising under Regulation Z?

A "trigger term" in advertising under Regulation Z refers to specific terms that, when used, require the lender to provide additional disclosures to ensure consumers understand the full context of the credit being offered. These terms typically include specific amounts or rates, such as "down payment," "monthly payment," "interest rate," or "finance charge." When any of these trigger terms are used in an advertisement, the advertiser must also disclose other key information, including the total cost of the loan, the terms of repayment, and potentially other financing terms that might affect the consumer's decision.

Using trigger terms is designed to prevent misleading or incomplete representations of credit terms to consumers, ensuring transparency in lending practices. By highlighting that certain terminology necessitates further disclosure, Regulation Z aims to protect consumers from being lured by attractive initial terms without understanding the full financial implications. It's crucial for financial institutions and advertisers to comply with these regulations to maintain fairness and clarity in the marketplace.