It’s annoying isn’t it: half way through signing up to some online payment provider, or a music download service, you have to click “I agree”. And of course we always agree and we haven’t actually read what we are agreeing too.
In fact at Think Money we recently did some research* into just this topic. We established that 37 million of us (75%) had agreed to a contract or legal agreement without reading it – typically iTunes store, PayPal and eBay user agreements were mentioned. But others admitted to signing up to phone contracts, broadband contracts and even loans without reading the T&Cs.
More worryingly three quarters (75%) of those that did sign on the dotted line (either literally, or metaphorically for online agreements) said that they came to regret doing so. I think there are two problems here. Firstly the contracts are too long and too dull (70% of people gave length as a reason for not reading them). We calculated that it would take over an hour to read many of them, even assuming you could make head or tale of the legalese. Reportedly, some current accounts have more than 29,000 words in the T&Cs. There’s no doubt that many of these agreements are so asymmetric as to be unfair.
But the second problem is that as consumers, we know that we’ll get stung either way. We don’t read small print as there’s always a clause which means “heads you lose, tails the company wins”. This is a problem of trust, and is based on years of experience of coming off worse when dealing with banks, insurance companies and the like. In fact over one in five (23%) said they didn’t read the agreements because they didn’t trust the firms to stick to them. There was a great example of this earlier this month where Bank of Ireland invoked a “Special Condition” to increase the interest rate on its tracker mortgages even though the base rate hadn’t changed.
Not reading actually goes further than this – the recent OFT report into Personal Current Accounts showed that only two thirds (67%) of people who never go overdrawn read their bank statements. Interestingly, the more people were overdrawn, and the more they were being charged, the less likely they were to read their statement – just 39% of people who are always overdrawn said they read their statement.
Typically, regulators’ response to this type of problem has been counter-productive. Faced with a problem of, say, people not knowing what the interest rate is on their credit card the regulator has just obliged firms to add extra detail and length to the statements people already aren’t reading. Regulated products such as mortgages and pensions now have so many pages of disclosures and Key Features even the most assiduous consumer would struggle through it.
So what does all this mean for us, the PR person? Two things, I think:
Firstly we must redouble our efforts with our clients and employers to promote clear communication, to remove corporate double speak and to champion simple, easy to understand products and services with the minimum of “wrinkles”.
Secondly, we must accept that many people simple don’t read any more. I am not suggesting that they can’t read (although in some cases that may be true). So we must think video, audio and images. Apple products are so intuitive that in effect, they come with no instructions. My new TV is more complex but came with a “quick start guide” that features a series of different pictures and virtually no words.
There’s no doubt that the majority of people find personal finance dull. Over the past few years the media channels and communications tools we have at our disposal have changed. But the challenge for financial communicators and PR people remains the same – to make personal finance interesting and engaging. That’s what makes the job fun.
*Research conducted by Opinium who questioned 2,017 adults (a nationally representative sample) between 29th and 31st January 2013