by Erna George. How are brands behaving to allow consumers to feel partnered and covered against legal consequences of their signatures on seemingly innocuous agreements?
It all started with severe frustration in buying a car via a trusted financial services brand. Only, I was forced to deal with a third party — dual forms and dual processes that drove me to feel as if I needed a lawyer to protect my interests. When I looked deeper, the ‘iffy side’ to contracts in the brand-consumer relationship was plain to see.
Seeing both sides
Now that I sit at the marketer’s table once again and have a stack of areas to comply with on messaging, quality, and more, I understand the challenges of this. But, when I sit as a consumer, I see the other side, too.
Even with the Consumer Protection Act, it is still a significant task to get things done as a consumer without the daunting contracts or Ts and Cs that are a challenge to understand.
On calling my bank to get a car loan, I expected a simple process, given all financial services profess to straightforward sign-on done via one call. I applied and was to sign a contract with the bank, including admin fees and other costs plus, of course, the monthly instalment. Then I received a mail from a third party hired by the bank to run checks on myself and the car. The middle man also required me to sign a contract with the third party — only the fees and costs quoted by the bank were repeated on its form.
Signing for the same costs twice
Essentially, it stated that I can pay the admin costs upfront or over the term of the loan with the bank, only there was no tick box to select which I would prefer. Upon reading it several times, it became clear that I could be signing for the same costs twice.
When I brought this to the sales consultants’ attention (on both sides), their exasperated response was it would not happen and I should just sign. They behaved that, by asking the question, I was being difficult and should simply have faith.
The reality is that, if I signed an ambiguous clause, only I am held responsible; for the brand and its third party to brush off the query felt isolating. What could I do but sign and trust the brand?
Less than bargained for
The reason I was so pedantic is that I have heard too many stories of people trusting, signing and finding themselves with less than they bargained for.
One of these I overheard while in the lobby of a conference centre. A young couple with a little daughter came to a meeting with a consultant about cancelling their timeshare. They wanted to have another baby and, to make this feasible, would prefer not to spend funds monthly upon timeshare but upon their family’s daily needs.
The consultant’s response explained that they had signed a contract in perpetuity. They were liable to pay for the rest of their lives and so were their descendants, yes, forever. The brand salesman had said they could sell the timeshare back to the business at any time but it seems that he’d been less than generous with the truth.
Devastating
He had mentioned all the good stuff and not the perpetuity clause or that the repurchase was at the brand’s discretion and not guaranteed. The couple had skimmed some of the contract but did not understand it all so assumed what they were sold verbally matched the contract. They left with the contract intact. The impact of having to wait to expand their family and the future cost legacy they would leave their kids was devastating to both.
In terms of our law, when a consumer enters into a written contract or agreement without reading the contract, they will be bound by the terms and conditions of that contract in terms of the legal principle ‘let the signatory beware’ (caveat subscriptor). Without reading these, consumers, like the couple above, are bound by conditions, whether favourable or unfavourable to them. It is unfortunate that so many contracts have been constructed with language incomprehensible to the average consumer.
The Consumer Protection Act of 2008 shifts things marginally, stating that agreements must be written in basic language and that financial obligations must be specified in detail. The only hassle is that most agreements are so long and in such small print; who actually reads these? The act states that, if consumers do not understand, they should get a lawyer to assist. Just how many consumers can afford this?
Who does power vest with?
If I go by my recent experience, despite my actually understanding a very basic contract, brand parties would not change their clauses so the power does not seem to rest with consumers. At no stage could I speak to a supervisor or someone who could alter the contract. I was the crazy consumer frustrating the call-centre representing an organisation that could charge me twice. I did not have the time to change the world; I needed a car, so I signed!
Are brands becoming removed from their market by call-centre agents and third parties? Has the customer has simply become a signatory and a source of income? Given the size of brands and the resources at their disposal, the bias in ‘let the signatory beware’ is substantial. Let the signatory beware assumes that consumers understand their rights; that they have the capability to understand legal terms or resources to retain legal counsel and that all sales people provide all relevant details not a one sided pitch. While the signatory must beware, wouldn’t it be great if brands made it so that it was less necessary?
As more layers are placed between the brand and consumers, brands need to find a way retain their bond with the consumers they need support from. Consumers will lean towards the consumer-champion brands or brands that reflect processes, a voice and experiences that are fair and with fewer complications.
The same set of rules
Brand must hold themselves to the same set of rules as they do to their customers:
- Call centres, third parties and sales teams must reflect the brand values and treat the customer with deference — and not as a signatory or source of cash
- Contracts must be made simpler and the process must reflect fair practice
- Consider becoming the brand that partners and educates consumers so they no longer need to beware
If not, one day I will be writing a column titled, “Let the brand beware”!
Erna George is the new marketing executive of Pioneer Foods’ Cereals & Other division. She has worked on both client and agency sides with diverse brands and categories — from FMCG, alcohol and agriculture to financial services and entertainment — in countries across many geographies, including South Africa, Mozambique, Nigeria, Kenya, India, Philippines and Brazil. She contributes the monthly “Fair Exchange” column, concerning business relationships and partnerships in marketing and brandland, to MarkLives.
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