Who Actually Reads the Terms & Conditions?

June 16, 2007

Do you read every word of the terms & conditions when you’re signing up for a new account?  Whether it’s an email account or credit card application they all seem to come with a lengthy terms & conditions.

Who Has Time?
I just signed up for a service online last night and their terms & conditions page was 4369 words long, 9 pages pasted into Microsoft Word at 12 point font.  I had a lot of things to do and didn’t want to take the time to sit down and read through a lengthy document.  One thing that really bugs me is when I signup for a product or service that’s supposed to make my life easier, faster, or more convenient and have to trudge through 10 pages of terms & conditions in legalese.

Who Understands Them?
The main reason for the terms & conditions from the company’s perspective is to lay out exactly what they will & won’t do to protect them from liability.  I’d be willing to bet most companies don’t care whether you read the conditions or not, just as long as you check the box that says “By checking this box I agree I have read & reviewed the Terms & Conditions”.

Since the target audience is more lawyers than customers, the conditions are often written in legal jargon that might still leave you scratching your head even after reading through it a few times.

Who Reads Them?
We have come to expect terms & conditions to be long and confusing so the thought of struggling through them often deters us from reading them at all.  The obvious problem with this is that when you agree to the terms and conditions you may not know what you’ve gotten yourself into until days, months, or years down the road when something unexpected pops up.

When I’m dealing with a financial contract such as a loan or credit card application I make sure to read the whole document but if it’s for something such as a merchant or a service I have an abbreviated method I use.

How I Scan Terms & Conditions
Most terms & conditions are separated into multiple sections, each marked by a header in large bold text.  What I typically do for non-financial documents is to scan through the headings to see which sections I really care about. 

I always look for the Privacy Policy section to see how they’ll handle my personal data.  I scan for headings on Arbitration, Governing Law, Jurisdiction, or Forum for Disputes that lay out how any disputes with the company will be settled. 

Another section I look for is something about Changes in Terms & Conditions or Changes in Products & Services that details how the company will interact and inform customers when modifying their terms or their products/services.  Lastly, I check for any mention of additional fees.

Did I miss any key parts of the Terms & Conditions you should look for?  Do you think people can get a good feel for the important aspects of a terms and conditions document by just scanning it or do we really need to read the whole thing? 


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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7 Responses to Who Actually Reads the Terms & Conditions?

  • MakeType

    Yeah, its nuts how much it can cost you and one of the most worrisome aspects is how much at risk young people are. I just read an article titled “Plastic replaces pocket change,” and it says that people under 25 are using cards so much that the credit card companies are starting to call them Gen P – for generation plastic. Its really worth a read if you’re interested in seeing how much people depend on these things and don’t even think twice about the hidden fees and charges they could be paying like interchange. I remember when I was in college and I know I wasn’t that savvy when it came to these things, but thankfully I wasn’t a big credit card user – I just had one for overdraft protection that was associate with my checking account which still makes sense in my book for a college kid to have. If you’re interested in the article you can find it here:

  • Ben

    Q, good luck with the C-section!

    MakeType, I agree credit card fees can end up costing you a lot of money and if people don’t read the terms, they may not know what they’re on the hook for.

  • MakeType

    I think you raise a good point about the terms and conditions that credit cards companies throw at us. I think the biggest problem with these lengthy contracts and such is that even if a normal person were to read them all they probably wouldn’t be able to understand it either. Additionally, I think the credit card companies are not upfront with they ways they can change their rates and fees without consumers knowing what is going on. Hopefully http://www.unfaircreditcardfees.com who I work with and other similar groups will help to shed some light on hidden costs like interchange fees that most consumers don’t even know exist. While just being able read through all of the terms and conditions would be a positive first step with this issue, I think there is a lot more too it and that nothing will be done if the credit card companies are left to their own devices.

  • Tim

    Q, surfing porn is perfectly fine at the hospital…it’s surfing for malpractice information which is prohibited.

  • Q at $1 Million to My Name

    Here at the hospital, 30 minutes before they performed a C-section on my wife (major surgery), they were shoving consent forms under her to sign.

    Heck, to even type this comment, I had to log on to the hospital’s wireless network. To do so requires you hit “OK” below a long list of Terms and Conditions. Yeah sure I’ll read that! I think it mostly says don’t surf porn in the hospital.

  • MoneyNing

    The obvious safe answer is of course “Yes, you should read the full terms and conditions”. I’m one of those that don’t read the terms and conditions, but I would guess that you can call the company up, and in most cases ask someone to explain the terms and conditions to you line by line where you can hear someone say something and compare it to the words shown on the sentence.

    This probably works particularly well on mortgages etc since there is usually someone with you when you sign a document. This would not work so well in something like signing up for the adsense account.


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