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A recent survey conducted by PPI claims company Canary Claims discovered that only 32% of people read the terms and conditions of a financial agreement before signing.
It’s no surprise that so many people don’t read all the terms and conditions (T&Cs). Often extremely lengthy and difficult to understand, people are put off from reading all the information before signing or ticking that virtual box. In 2014, the BBC reported that some car insurance T&Cs consisted of 30,000 words. Despite financial agreements being so long to read, somewhere in all that jargon and filler, they do hold valuable information for customers.
The problem is that customers are now faced with more situations that require reading T&Cs than ever before. From logging onto free WiFi to accepting the cookies on a website, customers assume that they’re not signing away their lives when clicking ‘accept’ or ‘yes.’
Financial agreements include information which customers may need later when dealing with the bank. Are customers at risk by not reading all the T&Cs of a financial agreement?
Reading T&Cs: a generational thing?
The results from the Canary Claims survey reveal that there is something of a generation gap when it comes to reading terms and conditions. Of those between the ages of 18 and 24, only 25% stated they read T&Cs. In contrast, 45% of those over 65 said they do.
Those in the over-65 category may have previous negative experiences with the banks, leading to a more thorough reading of T&Cs before signing. Many people were conned into buying PPI without needing to, for example, which has led to millions of PPI claims in the past decade. This could be one of the reasons the older generation read terms and conditions with a keen eye.
Are customers at risk from not reading T&Cs?
Unfortunately, terms and conditions do include important information regarding a person’s financial contract. Hidden fees, interest rates, repayment plans and cancellation policies are often found in T&Cs. All of these are essential pieces of information for readers.
Even if the customer has already read a summary of the main terms of the contract or account, double checking the small print is advised. A quick glance to find the crucial information doesn’t take too long and will give the customer valuable information which could save them hassle later down the line.
Could this lead to another PPI claims scandal?
If banks know that most customers don’t read all the T&Cs, there is nothing stopping them burying some crucial details in there. The mis-selling of PPI was a huge financial scandal and, although many customers were incorrectly told that PPI was compulsory, clearer terms and conditions may have highlighted otherwise.
The upcoming PPI deadline means that, finally, the scandal is coming to a close. However, it hasn’t stopped the banks from paying nearly £30 billion to customers for mis-selling the insurance. Before the August 2019 deadline, thousands more PPI claims are expected to be made due to the Plevin ruling. The Financial Conduct Authority is continuing to promote the deadline, using Arnold Schwarzenegger as a headline-grabbing frontman, telling people to “do it now!”
For terms and conditions to be read by more than 30% of people, the banks and lenders need to make T&Cs more accessible for customers. This means cutting out complicated language and making it considerably shorter than 30,000 words.