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October 17, 2018

Consumers at Risk? Only 30% Read Financial Terms and Conditions


Consumers at Risk? Only 30% Read Financial Terms and Conditions

Consumers at Risk? Only 30% Read Financial Terms and Conditions

New statistics show that only 32% of the British population read the terms and conditions when signing a financial agreement.

February 22, 2018 ( datsyn.com) – The research was conducted by PPI Claims company Canary Claims . It asked over 1,200 UK consumers ‘do you read all the terms and conditions when signing a financial agreement, such as opening a savings account?’ Over 40% of respondents answered ‘no’, while 26% of respondents answered that they ‘sometimes’ read the T&Cs.

Terms and conditions must legally be signed before any financial account is opened or a financial product is bought. With the rise of online banking, this usually takes the form of a separate online document for consumers to read. Users must then tick a box, acknowledging that they’ve read and accepted the terms and conditions.

The Process of Reading Terms and Conditions

Criticism about terms and conditions have been raised before. The documents which consumers must read and sign can be up to 30,000 words long and are rarely easy to read. Small font and complicated language are two struggles that people face. The survey results indicate that many people are ticking the agreement box without fully reading all the terms and conditions, though it is debatable whether it is even possible to do so accurately.

Banks, building societies and credit card companies outline the basic terms when listing products. However, terms and conditions go into greater details on important factors, such as cancellation charges and interest rates.

The Age Gap

The results of the survey showed disparity towards terms and conditions based on the age of the respondent. Those between age 18 and 24 were the least likely to read the terms and conditions, with only 25% answering ‘yes’ to reading them.

Respondents over the age of 65 were found to be the most likely to read the terms and conditions, with 45% responding that they do read the terms. The age difference may be due to the fact that those in the higher age category have previous experience with the banks. The financial crash and various financial scandals, such as Payment Protection Insurance (PPI), have led to feelings of distrust amongst many.

Trust in Banks

Trust in banks has decreased over the years, with many consumers now choosing banks based on their ethical rating.

The PPI scandal is an ongoing reality of why many consumers distrust the banks. Nearly £30 billion has been repaid to customers for mis-sold PPI. The Financial Conduct Authority has set a PPI claims deadline for August 2019. PPI was mis-sold to many as a ‘compulsory product’, or added on without customers consent. Incidents such as this highlight why reading terms and conditions are of vital importance, so the fact that up to 70% of UK consumers do not do so is a serious concern.

Source: PR

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