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The Devils is in the Details: Why it pays to read the fine print

In every aspect of our daily life we come face to face with fine print. From service agreements to advertisements, you are sure to see fine print containing hidden fees, restrictions or reoccurring charges. Consequently, even purchases that on the surface seem minor can have huge affect on our finances.

Why don’t people read?

Whether it is lack of time or inconvenience, many people are too busy to read the details of contracts, agreements or advertisements. Others are too embarrassed too admit they don’t understand what they are reading. Businesses outline the details of their offer in the fine print including hidden charges. The fine print is what protects their interest.

What happens if you don’t read?

Unfortunately, if you sign a contract, agree to terms or buy something without reading the fine print you are still bound by its terms. You are giving your rights to the other party. If there is a dispute later, you will lose especially if the agreement contains an arbitration clause, which prevents you for suing.

Noteworthy examples

Service contracts-Cell phone carriers, cable companies and many other service providers have early termination fees if you decide to discontinue service before the contract ends.

Free trials-Sometimes you are offered a free trial of a vitamin or beauty aid. In exchange, you are subjected to service fees, shipping or reoccurring billing that requires you to call to cancel.

Leases-Leases are no fun. They restrict your use of the apartment, define how you can alter the apartment (no nails in the walls) or levy fees for bounced checks as well as breaking the lease.

Memberships-Many times they entice you with a free item such as a credit report, book or movie. Other times, it is a discounted item that lures you in. Regrettably you agree to a service with reoccurring billing or you are required to buy several items at full price before you can end the contract.

Restocking fees-Sometimes, if you want to return the item, you are subjected to a restocking fee. This is common in consumer electronics, equipment as well as furniture where the fees can be as much as 50%.

Software Licenses-Most people don’t read them but they typically limit the software company’s liability, define acceptable use as well as define restrictions. To demonstrate that most people don’t read the terms of software agreements; Playstation in the UK added a clause where you agreed to sell your soul. It turns out 1 in 10 people didn’t bother to read it and sold their soul to Playstation.

Financial Documents-If you don’t read your financial documents you could be in for a big surprise. Sometimes interest rates change after a trial period and other times you don’t qualify for those low interest rates after all. Credit cards, checking accounts, certificate of deposits (CD), annuities and IRA accounts can have service fees, penalties and other charges hidden in the fine print. Even some structured settlement purchasers may hide additional fees in their contracts.

What should you do?

Read everything thoroughly or have a lawyer or trusted advisor read it for you. Ask questions. Make sure you understand everything. Make sure the terms are clearly spelled out. Do the math? Does everything add up to what they told you? Make sure there are no mistakes such as the wrong price or a higher rate. Always retain a copy of the contract for your records and know what you are signing. If the salesperson or other employees try to rush you along, won't show you the contract or give you time to read it-they're hiding something.