How many times have you bought a new product and thrown away rather than read the instructions? Downloaded a new app and clicked ‘accept’ on the terms and conditions without reading them? Or opened a bank account without reading the eighty-five page ‘booklet’ that comes with it? (For what it’s worth, that’s not a booklet – that’s a book!)
The title for today’s post comes from the first page of an everyday bank account terms and conditions book. ‘Well done’, it says, ‘you made it to the first page – only 59 to go’.
But do you really need to read all that? And why do they make it so darn long if they want you to read it?
Unintelligible on purpose
One of the key themes we’ve explored together here on Enrichmentality is the frequent disconnect between the language of financial experts and the general public.
Part of this is simply a result of years of training and the jargon that goes along with any specialisation. But part of this disconnect is intentional. It is in the best interests of the financial industry for its clients to lack confidence and a sophisticated understanding of financial ‘products’ – including debt. Why else would companies continue to use small print when most terms and conditions are distributed electronically nowadays – it’s certainly not to save on ink.
Over the past few decades, more councils and institutions have worked to make their services more accessible for people with a wide array of needs – installing ramps, providing braille and sign and interpreting services, better visibility and so on. There is still much more to be done. The same could be said of making legal and financial documents linguistically accessible – that is, ensuring they make sense to everyday readers in everyday language.
Sometimes, legal linguistic inaccessibility is obvious, argues Harrington, whose chapter in The Language of Money and Debt I blogged about in my last post. The use of technical terms, or Latin are glaring examples. But it is the words which appear familiar from everyday use, but differ in meaning in their legal usage, which are of more concern. ‘Money’ is one such example, defined by Hudson as a ‘perennial problem’ for lawyers. One text addressing the meaning of money, Mann’s (1938) The Legal Aspect on Money, now in its 7th edition, Harrington reports weighs in at a massive 891 pages. (I guess compared to that, eighty-five pages or so is a booklet!)
As Harrington concludes, although a real understanding of what money (and debt) means in a legal context may have to remain the domain of layers, ‘what can be achieved is a greater communication of the rights, or limits of them, which ordinary people have over their money: knowledge in itself will aid against injustice.’
For most of us, I hazard a guess, terms and conditions are a case of TL;DR – too long; didn’t read. One recent survey found that some documents now weigh in at the length of a short novel, and 73% of people admit they don’t read the full fine print. Of those who do bother, only 17% say they understand it.
The first contract I ever signed was a tenancy agreement when I moved away from home to attend university. I’d just turned 18. The landlord sat, bemused, as I insisted upon reading each page in full before initialing it. None of the other tenants in any of the many other apartments in the complex had ever done that, he said.
Just read it.
When we took out our first mortgage a little under a decade later, I sat at the kitchen table reading the much lengthier documents in full. This time, it was with a sense of dejection that perhaps came with age as opposed to any change in circumstance. I now realised that even if there were terms or conditions I did not agree with, there was very little I could do about it. As a prospective tenant – or as a prospective homeowner – you aren’t exactly in a position of negotiating power.
Even so, knowing what you are getting yourself into is vital, and can save you a lot of money.
For example, reading the terms and conditions of our income insurance meant we knew that once we were more than 12 months ahead in our payments there was little point to paying for it any longer. Although it was a great reassurance to have in the first year of our mortgage, since the insurance would not pay out until there was actually money owing on our loan, and was only good for 12 months, it quickly became useless to us since we were paying our mortgage down so rapidly. Without reading the contract in full, we might have continued paying for absolutely no benefit.
Boring, but important
Reading terms and conditions is tedious. According to another source, when signing up for products and services online, only 7% of people in Britain read the small print. Nearly 60% of people would prefer to read an instruction manual, or even their credit card bill. An incredible 12% say the phone book would be preferable. But it is vital. More than a fifth of those surveyed said they had suffered as a result of not reading the applicable terms, finding themselves locked into lengthy contracts or losing money by not being able to cancel or change bookings. And when it comes to social media, there is a whole gamut of other rights you may be foregoing. (If you have a Facebook account, make sure to read this HuffPost article too).
When it comes to the (often exploitative) horrendously lengthy Terms of Service or End User License Agreements that many applications force upon users, there are at least the superb sites tosdr and TLDRLegal to help navigate your rights. I’d love to see something similar for the financial industry, but haven’t found anything so far. There are, at least, some companies who are taking it upon themselves to meet both legal requirements and the needs of customers.
Studying for my Diploma of Financial Planning I read through many a financial product’s terms and conditions, and by far the most down to earth was that of ING – whose question I borrowed for the title of this post. (By the way, if you are thinking about opening an ING Australian account, try the promo code ECJ150 and we might both get some cash, depending on what promotions ING are running. But I strongly recommend you always check a comparison site like mozo first to get the best deal for you!)
Have you come across any other companies that express themselves clearly? Let us know in the comments!