We’ve been working with Fair Go on an item about clarity in consumer contracts. Earlier this week Fair Go interviewed people about a typical wordy clause from a banking contract. They wanted to know if the clause was readily understandable to the person in the street. Most people’s comments were along the lines of ‘it’s unintelligible’, including those of a lawyer who had a look at the text.
Here’s the clause in question for you to have a go. And be warned: it’s a single sentence of 105 words.
The customer may at their sole discretion request the bank to reverse any Direct Debits initiated by the Initiator under the Instructions by debiting the amount of the Direct Debits back to the Initiator through the Initiator’s bank where the Initiator cannot produce a copy of the Instructions and/or Confirmation to me/us that I/we are reasonably satisfied demonstrate that I/we have authorised my/our bank to accept Direct Debits from the Initiator against my/our account provided that the request is made not more than 9 months from the date when the starting Direct Debit was debited to my/our account under the Instructions by the Initiator.
If you think we have paid a direct debit you did not authorise, you can ask us to reverse it. You have 9 months to do this. If the organisation we paid the money to can’t prove that you asked for the direct debit, we will try to get the money back from them and return it to your account.
Our ‘translation’ revealed that the bank doesn’t actually commit to returning the money to your account. The original text hints at that action but does not actually say it. So we used the word ’try’ in our version.
We work with many financial institutions, large and small, across New Zealand. The new financial regulations that have come into force over the past few years have had a very positive outcome for consumers.
Truly bad financial contracts are much less common than they were years ago. However, most, if not all, financial institutions are still working hard to rewrite their huge body of contractual material and general information.
We expect that the organisation, like most in the financial world these days, is working hard to put everything in customer-friendly language.
We love to help untangle wordy clauses. You can contact us at firstname.lastname@example.org