What is a "trigger term" in advertising?

A "trigger term" in advertising refers to specific credit information that necessitates additional disclosures under the Truth in Lending Act (TILA). When certain specific terms related to credit are used in marketing materials, such as the amount or percentage of any installment payment, the amount of credit, or the period of repayment, the lender is required to provide more detailed information about the loan. This requirement aims to ensure that consumers receive clear and accurate information about the costs associated with borrowing, allowing them to make informed financial decisions.

The necessity for additional disclosures is designed to protect consumers from potentially misleading credit offers and to provide transparency regarding loan terms and conditions. When trigger terms are included in advertisements, it signals the need for further information, which must be disclosed clearly, ensuring compliance with Regulation Z requirements.

The other options do not accurately define a trigger term within the context of TILA. Options referring to online advertising or merely attracting attention do not capture the regulatory implications and obligations tied to the use of specific financial terms in advertising. Similarly, while denoting the type of loan might be part of an advertisement, it does not carry the same implications for required disclosures as the defined trigger terms do.