The small print you should always read
It can be a chore but it's vital you check these things in your Ts and Cs.
The biggest lie on the internet is ‘I have read and agree to the terms and conditions’.
I imagine that a lot of us would say the same when it comes to physical Ts & Cs too.
Small print documents often beat a university dissertation for word count, using legalese printed in a tiny font. With all of the time and faff it takes (plus the potential cost to your sanity), why should we even be reading the terms and conditions?
“Every bit of small print is a potential loophole,” says Liam Reddington from the Plain English Campaign.
“People are baffled with jargon. They lose the message”.
He mentions a popular budget airline which has a terms and conditions tick box on the second page of its online ordering process. If you actually click on these terms and conditions there are 19 legal articles, each one a page long. All of it is written in a small font which is difficult for anyone, let alone the elderly and the partially-sighted, to read.
This small print labyrinth means that passengers could stand to lose their money or their luggage without even realising it.
Insurance companies are the worst, with Reddington citing an example of fridge/freezer cover in which you have to retain all of your food receipts to get a full payout.
As you can see, you could stand to gain or lose a lot if you ignore terms and conditions. As much as anything else, there’s a chance that you could incur unexpected penalties and it could even affect your credit score.
What you should be looking out for
This is tricky, as you’ll need to look out for different things from contract to contract. To help you out, I’ve rounded up some of the most common oversights on some of the financial products most of us have.
Insurance
Look for what could void your home insurance, such as not having specific door locks or a burglar alarm. Burglary through an open window will also invalidate your policy as well as leaving your house unoccupied for a certain period of time, usually 30 days.
Critical illness cover may be very limited, only treating the most severe forms of illness. Some won’t cover you for breast cancer if it’s in situ, for example.
Check what illnesses are and aren’t included in specialist travel insurance and private medical insurance policies.
Some circumstances may render life insurance policies invalid, such as being in a high-risk job, skydiving as a hobby or having serious health problems. Medical history and lifestyle issues may also catch you out. Your insurer may not pay out if your death involved drug and/or alcohol misuse.
You could be missing out too, like getting free windscreen repair with no strings attached through your car insurance policy.
With any type of insurance, check if premium levels are fixed or variable and if there are different excesses for different claims.
And remember that any insurer has the right to cancel your policy if you weren’t completely honest about your circumstances.
Borrowing
On any type of loan you should check the APR (the annual combination of interest and charges) and the conditions for repayment, noting what you’ll stand to lose if you don’t.
Mortgages and personal loans have Early Repayment Charges (ERCs) that they might not state in the main body of the deal.
For mortgages specifically, check the date when the discounted or fixed rate runs out. Make sure you’re aware of the conditions for moving to another provider before your tie-in period is over or for missing a payment.
There could be perks with credit cards, such as getting an extra 12 months (maybe more) on a manufacturer’s warranty for electrical goods if you’ve paid by credit card.
Providers only have to give 51% of applicants the advertised rate under EU rules. Some cards also have a minimum spend as well as dormancy fees, foreign transaction fees and late repayment charges.
Phone, broadband and digital TV
As I’m sure we all know, providers have the right to bump up prices part-way through your contract. You might also find missed appointment fees for installation buried in the small print.
While you’re there, find out whether your provider has the right to vary your broadband speed and what to do if speed is significantly lower than promised.
Don’t believe a broadband provider when it says that its broadband is free as line rental costs are always added on to the advertised price.
With any communications package, you should be checking early termination fees, fair usage policies and conditions for cancellation and switching.
Bundled deals, where you take more than one service, are notorious for linking to other webpages for full terms and conditions which makes things needlessly complicated. It’s a pain, but make sure you don’t skimp on important details.
Pensions
If you're buying an annuity, have a look at the guaranteed annuity rate. Note when the rate can be taken, whether the rate continues if you want to include a dependent and whether the rate stays the same if you opt for what's known as escalation to counter the effects of inflation.
Energy
Before you switch energy suppliers, have a look at the notice period and if there are any charges for early termination.
A small handful of energy suppliers will take a fee before your energy supply actually starts rather than after the first quarter so watch out for that.
Savings
Despite their name, some easy access savings accounts only allow you to make a certain number of withdrawals a year or you'll be penalised.
You should also find out how much it will cost you to withdraw money early from long-term savings accounts, just in case you need the money in an emergency.
Picking up key information
It’s worth brushing up on your skimming and scanning skills to help you identify key information quickly.
BBC Skillswise has some great resources to get you started.
Next, make sure you know frequently-used financial terms. Research done by the Money Advice Service at the end of last year highlights that many don’t know fundamental terms used in the small print for financial products, including ‘interest’, ‘loan’ and ‘APR’.
Find a full A-Z of financial terms over at the Plain English website.
The Plain English Campaign is working with companies around the world to push them to make small print documents that are no more than one sheet of A4 in length, use everyday language and are written in a font that is no smaller than size 12.
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Related guides:
How much will your mortgage cost?
How to switch your phone, broadband and TV packages
How to pay less for your private medical insurance
How to pick a car insurance policy
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