Remember, this is the discussion for Thursday.
Man Tries to Beat Bank at its Own Game with Fine Print that Gives Him
Unlimited Credit
When it comes to fine print
on user agreements and terms of service, I’ve found that there are those who
blame companies for making these documents so long and complicated that most
people will never read them (and might not even be able to understand the terms
even after reading them), and then there are those who say consumers can’t
complain if they don’t first read and understand everything they agree to.
Here’s a story out of Russia that should appeal to both sides of that debate.
RT News has the story of a man who
looked at an unsolicited credit card offer from Tinkoff Credit Systems back in
2008 and wondered what would happen if he signed the agreement, but only after
writing in his own additional terms by hand.
Among the amendments in his
version of the contract — unlimited credit, 0% APR, no fees, including the
stipulation that he “is not obliged to pay any fees and charges imposed by bank
tariffs.” Since the contract included a URL for a web page containing the full
terms of service, the customer also wrote in a new URL of his own so that the
bank couldn’t just say “but these terms are different than what’s published on
the site.”
Per the amended terms, every
change to these terms would result in a payment of 3 million rubles ($91,000)
to the customer, or a cancelation fee of 6 million rubles ($182,000).
A pretty sweet deal. No way
Tinkoff would agree to it.
But of course Tinkoff did
agree to it, because it did exactly what most of its customers do — accepted
this contract without reading it.
“The opened credit line was
unlimited,” said the man’s lawyer. “He could afford to buy an island somewhere
in Malaysia, and the bank would have to pay for it by law.”
He didn’t buy that island,
but he did use the card for two years, racking up only $1,363 (including
interest and fees) during that time. Not bad, considering the sweet deal he’d
written for himself. But of course he wasn’t paying that amount because he
maintained that he had a 0% APR and could theoretically just keep making
charges on the sheer promise that he’d pay up someday.
And so Tinkoff sued the
customer. However, the court held that his amendments were binding since the
bank accepted them, whether it looked at them or not. The court said the
customer only owed the principal balance of around $575.
Perhaps emboldened by this
victory, the customer then sued Tinkoff for a whopping $727,000 for its failure
to honor the amended agreement and for not paying out the agreed-upon penalty
of $182,000 when it cancelled his account.
“They signed the documents
without looking,” explains his lawyer. “They said what their borrowers usually
say in court: ‘We have not read it.’”
Tinkoff insists that it will
be vindicated and that the customer will ultimately get four years in prison
for fraud instead of the pile of cash he sought.
“We don’t have small print,
everything is clear and transparent,” wrote the bank’s founder on Twitter. “Try
to open a card – then we’ll talk. Stealing is a sin – in my opinion, of course.
Not all in Russia think so.”
By Chris Morran – Consumerist - August 9, 2013
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Discussion
Questions
With your partner, discuss the following questions.
Feel free to ask any follow-on questions you like.
1. What
are your thoughts on this story? Whose
side are you on, the man or the bank?
Who do you think
will win in the end?
2. Do you usually read the small print before you
sign documents? Do you usually
understand it?
3.
Have you ever regretted not
reading the small print more carefully?
4.
Are you good at managing your
finances or you often find yourself spending more than you intended to?
5. Do you have any financial tips for your classmates to help them manage
their finances better?
6. Are you happy with the service that your
bank/credit card provider gives you? Do you ever have problems with them? Have
you ever complained or contested any fees they charged you?
7. Do you think that banks in general treat their
customers well? Explain
8. If you had a credit card with 0% APR and
unlimited credit, what would you do with it?
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