I did. (My wife did not, but trusted that I had read everything.) I was given a copy of everything before the closing, and read every single line of each mortgage we signed, as well as all of the refinancing ones (total of five in the last 8 years).
At each closing, our real estate attorney went through every paragraph with us, telling us what the intent of each paragraph was, and if there were any unusual provisions in there.
I don’t read everything (especially software licensing agreements), but if I’m agreeing to something (with my notarized signature) that consists of one of the largest financial transactions of my life, I sure as heck read it.
Clicking “OK” if I agree to a software licensing agreement? Not so much.
I’ve been in a new place since June; one of the steps was setting up Internet access. I called every ISP in the area. The one I’d originally chosen tried to pull that on me; I cancelled the transaction right then and there and hired someone else (who are actually a subsidiary with a slightly-different business model, the Spanish communications industry reads like the Ptolemys family tree).
Many people are becoming more and more angry about the hidden conditions. “You can get a new phone for free because you’ve been our customer for three years!” Oh, how lovely. Then one year later they discover there is a “permanence clause”, if they change suppliers within 18 months of getting the new phone they have to pay hefty penalties. In the case of a lady in her 70s who’s been telling everybody she knows and even people she didn’t, the penalties would have been more than her expenses for that whole year she’d had the new phone.
There’s only so far back you can push, but people do push back.
I did read my mortgage and once scared a car salesman to the point of almost wetting his pants by asking about things like “early payment penalties”. Dad was an accountant.
In the US, it amazes me how the (civil) legal system doesn’t give a crap about the consumer. They think “buyer beware” is enough. But, NO!!! The consumer is being screwed left and right so the consumer CANNOT even beware, such as the fine print.
Has anything like this ever been legally challenged? If they did bury some outrageous condition on page 42, would it hold up in court, or could the user claim that no reasonable person could be expected to read the whole thing?
While I am all for calling Ralf out on his lack of cites, this one is obvious to all who look at it. Each bank offers something just slightly different to its customers, so that no direct comparison can be made.
And I have signed two mortgages and five refis without once having a mortgage lender require that I have an independent legal review of the paperwork. Perhasp you could provide a cite for that happening “often.”
To answer the OP, I think the reason we put up with small print is because we want the product/service and if the supplier of that product/service wants us to sign a contract and we want it bad enough, even if there are horrendous conditions, we do it and just hope the conditions don’t affect us or affect us minimally. It seems like 1/3 of the people I know in San Diego who bought an iPhone ultimately had to abandon it (or do a jail break) because AT&T coverage in this city is horrible compared to Verizon. Every one of them was hit with early termination fees in their contracts and seemed surprised by it since they felt ‘constantly dropped calls’ somehow allowed them to justify getting out of the contract at no cost.
I am not as bothered by small print and to me it makes sense. If it costs me X amount per page to print a standard contract for my product/service, and I have to print a bazillion of them, you can bet I want to keep the page count per contract as low as possible. In all fairness, I think most fine print isn’t really put there to screw the customer so much as it is to protect the company from consumers demanding ridiculous free products or services based on the lack of such terms. We all know that one douchebag who complains at every restaurant they eat at, sends food back, etc. in the hopes of getting something free or discounted…
Why they do it? Because the protection it affords the company versus the extremely minute customer base they lose due to having it is such that it is financially worth their while to do so.
On a slight hijack, I always wonder why the competitors of the first guy who did it didn’t seize on that as an opportunity to screw them. For example, every time an airline announces a new ridiculous fee they have tacked on (often in fine print), it seems to make the news. What surprises me is that rather than every other airline scrambling to lower their prices and screw that outlier out of business, many of them see it as a trend and tack on the same fees themselves, which smacks of price fixing to me. Presumably when BP had their big oil spill, or Exxon had the Valdez incident years ago, the other oil companies could have seized those opportunities to screw them out of business by taking advantage of their extra cleanup costs and bad press, but none of them seemed to do that. How come?
How would they do it? It was pretty well established during the spill that many/most BP gas stations were independent franchises. Consumers really don’t have much input into who supplies crude oil, and even if wholesale customers cared to boycott BP, oil’s pretty hard to have a preference for one source over the other, being a commodity.
Additional answer: ever notice how airlines don’t run competitive ads about safety (the closest they will come is talking about how new their fleets are, which also goes to comfort)? It’s because (a) it’s seen as in very poor taste to blast your competitor for an accident or disaster; (b) it’s seen as a recipe for biting you when the same sort of accident happens to you next week.
I did, both for my mortgage and my refinance. - I would hope you would too. Good thing I did on the mortgage contract, I had several letters stating the terms, but when I received the paperwork there were numerous errors. I corrected them, photocopied it, notarized the copies and sent the corrected contract back with copies of the letters. At closing, they hadn’t corrected the contract. The agents were going nuts because I was going through the paperwork with a fine-toothed comb, re-identifying the errors and comparing it to my notarized copy. They first said “don’t worry, no one actually reads this” Then they said “we never agreed to that” (I had the letters and copies stating that they had). Then they said “just sign it, we’ll fix it later”. I said I wasn’t signing anything until I had the contract we agreed on. I wasn’t in a hurry, but the seller was. They were able to get the broker on the horn and fix the contract.
For my refinance, I went with a lawyer. He was surprised and encouraged when I read all the paperwork, and he was in no hurry. Funny thing - with him, there were no mistakes - best couple hundred dollars I ever spent. I will always use a lawyer from now on for real estate.
Sure. I am a lawyer who frequently does this. I am in Ontario, so YMMV. For every mortgage from a bank, an insurance company, or a mortgage company affiliated with a bank or insurance company, where I have acted for the mortgagor/purchaser of a property, the mortgagee has required that I go over the terms of the mortgage with the mortgagor, and that the mortgagor sign off on my having reviewed the terms with him or her. If this is not done, the mortgage funds are not advanced. The only mortgagees who have not required me to do this have been small private lenders (e.g. vendor take-back mortgagees or local investors).
An easy way for a mortgagor to weasel out of the mortgage is to prove that he or she did not understand the relevant terms of the mortgage. It is pretty had to do this if the mortgagor’s own lawyer went over the terms with the mortgagor before signing the deal. Thats why the financial institutions up here require the mortgagor’s own lawyer to go over the terms with the mortgagor before the deal is completed. For Canada at least, this gives lie to Ralph’s assertion that banks want to confuse the borrower. That is the last thing the banks want, the proof of which is their insistence on the mortgagor obtaining independent legal advice.
Yes, there are differences between Canadian and American banking (the recent economic unpleasantness is proof of this), however, I would not assert that the differences are so great that while Canadian banks go out of their way to ensure that their borrowers understand what they are getting into, American banks try to confuse their borrowers. That’s why I want ralph to provide proof of his assertion, for it does not pass the sniff test.
There’s a difference between them wanting you to understand your obligations and thier deliberate obfuscation of cost structure to the client. This credit card uses the two-cycle average daily balance method, while the other guys use the intraday binary unicorn cycle, and guy #3 bases it on the rate posted on the internet when his wall clock reads 4pm. Same thing with mortgages. The advertised costs (APR, points) are easy to find, and then you get to the closing and find out that there’s a $250 charge if you don’t want to do escrows through the loan servicing company, and thier title insurance is 800 dollars (but other lenders are $600), etc etc. These fees are not easy to come across until you have already committed several hundred dollars to the process, and make it much harder to do a valid lender comparison.
Use an Upfront Mortgage Broker, and you will get all these things at the beginning.
Of course, that’s what I did when they screwed everything up it worked out, but I had to be diligent. But I think the issues were due to incompetence rather than a deliberate attempt to screw me (not that it makes any practical difference).
For my refi I went with my credit union - also all upfront and much more competent.
In regard to the “$19.99=$20” issue, FWIH, it’s about psychology. You THINK it’s a better deal, when objectively, it clearly isn’t all that much different.
It’s just another form of predatory capitalism, to my mind. It would appear to be the future.
I once had the utilities cut off to a building that was coming down. The gas company tried to charge me, in addition to all the other bullshit, $60 for closing my account. I said, “Hell no, I’m not paying that, are you out of your minds?” At which point, suddenly, they were willing to wave the ‘fee’. Made me wonder about how many people just paid it without making a stink.
There used to be consumer protections to save us from this sort of predatory business practice, gone the way of the Dodo, I’m afraid.
I keep waiting for the pendulum to swing the other way. Sort of; “Hey, want to understand your insurance contract? Sign with us, we speak english!” I’d sign up for that in a heartbeat.
There’s a startup in the works called BankSimple. Their selling point is that they’re simple and easy to use, they have good customer service, and they won’t try to screw you over on fees. They freely acknowledge that they don’t have the best interest rates, especially not teaser rates.
They’re not up and running yet, but I’m keeping an eye on them.
Sorry, but isn’t that what you hire a lawyer to do?
I mean, I didn’t read mine in the entirety. I received the paperwork, skimmed it, sent it to my lawyer, he crossed out a bunch of lines, sent it back, both parties signed. Seemed to work ok.
And I’m hardly a wealthy fool with a lawyer on retainer, this was just the lawyer I got through my company’s $12/month legal plan benefit.
Equally annoying is the fine print on TV commercials. There is no possible way that crap can be read in the time its on the screen. I’m sure they are meeting some regulation but it is pointless.
They have been known to change the mortgage even after you have read every word. This suit alleges that the mortgage banker changed the terms after the contract was negotiated.
The most egregious example was the theft of billions by Mitch Glazer. He had the job of correcting spelling in the Satellite Home Viewing Act of 1999. After it was voted on and passed, but before it was signed by the President, this scumbag changed the text of the bill so all recordings for a record label became “work for hire” and never reverted to the creator or their heirs. He was rewarded by becoming the head of the RIAA.
I agree. I just bought an airline ticket at an advertised price of $495. But by the time taxes, airport fees, and whatever else they could think of was added, it was $675.
One thing about the obscure language in contracts. This might not explain all of it, but I am under the impression that a lot of it is the result of some asshole of a judge taking a perfectly clear clause and interpreting it in an obscure way, resulting in the lawyers going back to drawing board not so much to make it clearer but to make it more airtight. IANAL, but I would appreciate a lawyer’s take on this.
IANAL, but when I’ve been given extremely long, fine-printy contracts in the past where I was worried about getting screwed or signing away some very basic, fundamental rights, I’ve felt free to take it upon myself to write on the contract myself before I sign it.
Often, this has come into play when I’ve done some dangerous sport-related thing and have been asked to sign a waiver, and I’ve written very clearly on the waiver (just above where I sign) something like:
Don’t have any idea if this would hold up in a court of law, or if this is even an acceptable form of agreement, but it makes me feel better about signing it.
it worked out, but I had to be diligent. But I think the issues were due to incompetence rather than a deliberate attempt to screw me (not that it makes any practical difference).