The Fine Print

The definition of ‘Fine Print’ according to Investopedia:

“Contract terms and conditions, disclosures or other important information that are not included in the main body of a document, but in footnotes or a supplemental document. Reading and understanding the fine print is essential when entering into an agreement. It often contains information that the issuer does not want to call to the recipient’s attention, but that is essential for the recipient to know”. 

Operating in the financial services business for 23 years and focusing on Insurance, Savings and Investments, I have dealt with business owners, CEOs, senior management and those just starting out in their careers. Over the years, clients/prospects facing financial trouble have shown me signed documents related to certain issue/s, and I find myself amazed at their naivety!

You, and your money, deserve respect and proper protection. The onus is on you! Penalties, early surrender, loss, possible legal implications and actions all result from not doing the obvious “Read, Understand, then Commit”.

Calling up and complaining that the terms and conditions were not explained to you or that you were hoodwinked into signing on the dotted line, without being aware of any risks or liability is useless if you have already signed the document/s. It is deemed that you were cognizant of the rights and obligations upon signing. Most agreements state that by signing on the dotted line, each party understands and most importantly agrees to all the terms and conditions.

Let’s face it, we are educated, qualified, and experienced people who run businesses, and we do a great job protecting the rights of our employer. However, when it comes to our personal financial matters, rights, and obligations, we seldom apply the same basic due diligence! This begs the question: are you not important to you? Isn’t your financial welfare important to you? Your signing on the dotted line has a direct impact on the welfare of your dependents.

A ‘simple’ document, is just as dangerous as a ‘sheaf’ of documents that require your signature. It is your right to ask for an explanation and it is your responsibility to understand your rights and obligations before signing. Under the law, ignorance is not a defense for breach of a contract. 

Some of the information in the fine print may be required by law or may be recommended by a company’s legal department in the form or a disclaimer or indemnification; these are designed to protect the company.

The classic example of fine print (which you really need an eagle-eye or a magnifying glass to read) is a credit card agreement which usually includes: the card’s introductory APR, the APR after the introductory period ends, the length of the introductory period, the APR for balance transfers and cash advances, the card’s annual fee, its late payment fee and other crucial details and penalties.

I’m not even going into more complex transactions like an investor reading a public company’s financial report. They should be reading the fine print to learn about the company’s accounting methods, long-term debt, employee stock ownership, pending litigation and other issues just to name a few.

As a start, YOU as the client/partner/employee/contractor etc. must READ and then ask how the financial product and services work.  This information must be provided in layman terms and in plain English/Arabic, explaining the financial implications, the possible risks, and further assistance in helping you understand.

These terms and conditions should be written in plain language with the use of legal or technical language, only where necessary. The written terms and conditions must clearly state your rights and obligations in relation to the product or service selected. Read and  understand the terms, conditions, and details of the product or service. Request full explanations to be sure that you have understood them and can fulfill them, before you sign.

 Be aware that financial institutions reserve the right to change the terms and conditions where applicable and inform customers accordingly. This is generally done by sending you a notification by mail which many times ends up unopened in your waste paper.

Sales and Marketing Literature VS Terms and Conditions:

How many of us notice/ignore the small asterisk and print in italics “*T&C apply”. These are an integral supplement to the terms and conditions and must be read carefully because any variation, indemnification, disclosure and disclaimer can be mentioned.

You have rights!

It is your right to obtain from the concerned representative a clear and simplified explanation about any product or service and their respective risk along with a professional and clear answer to any question concerning any clause or condition that is unclear. 

You have the right to request the use of the Arabic language in any document if your first language is not English. Otherwise, if the document is in Arabic, please request a qualified English translation. 

You have the right to read and obtain, in advance, a copy of each document and text referred to in any contract to be signed with the institution/company, such as appendices or schedules that outline additional or supplemental information which is integral to the whole agreement.  

You have the right to obtain-and you must retain-a copy of any contract or document signed by you with the provider, without any additional cost. 

You have the right to ask for the actual cost of any product or service and understand the penalties and implications if any payments or contributions are not met on schedule.

When you are committing to buy, lease or invest in any product or service, please ensure this is keeping with your risk profile and appetite, and long-term financial affordability. Also, make sure you have a clear understanding of the inherent financial risks associated with the product or service. 

If you are facing financial difficulties that prevent you from meeting your obligations or paying your installments on schedule, it is important to inform the concerned companies to determine the best alternatives or reschedule to facilitate continuity. 

DO NOT sign a blank or incomplete form, and make sure all the required fields and figures in the form are correct and complete before signing it. 

DO NOT provide any other party, under any circumstances, with any detail about your Bank account or any other critical banking or personal information. 

Be extremely careful when granting a proxy (Power of Attorney) to a third party to conduct any financial transactions on your behalf, by clearly determining the powers delegated under this proxy to act with your consent. 

DO NOT sign forms even if they are given to you by family members. These could land you in big trouble…you may become the guarantor of a loan!

I highly recommend that BEFORE you sign, you should-when necessary-seek independent legal advice with regard to clarifying the terms and conditions prior to committing.

The moral of the story: Make informed decisions about your money and protect your rights.  

Legal advice provided by Echelon Advisors.

By Sandi Saksena, Financial Counsellor & Empowerment Officer

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