IF A STRANGER asked for permission to access all of your contacts and monitor your incoming and outgoing e-mail in exchange for a free service, would you agree? At Houston Better Business Bureau, we are warning that most consumers are doing just that because they don’t read the contract terms and conditions for common transactions, whether in paper documents or online.
Those terms and conditions may surprise and frighten you. Their disclosures contain the details of limitations, exclusions, cancellation procedures, fees and data collection and sharing. These conditions are typically detailed in several pages of legalese that is formatted in small print where, according to regulators, businesses sometimes hide other important information.
In one example, the terms and conditions for a free contact-management mobile app clearly explains that it not only requires access to all of your contacts but also captures and stores your contacts’ telephone numbers, e-mail addresses, physical addresses and more.
Aside from storing and sharing this information with other parties, developers say the app may also collect logins, passwords and information gleaned from your connected social-media sites and scan your e-mail for information about who you are communicating with, how frequently and any information contained in an e-mail signature.
Unfortunately, consumers who didn’t read the fine print downloaded the app without realizing that, by doing so, they were giving consent for open access to information they otherwise would not have revealed.
The prevalence of cybercrime, identity theft and sharing of personal information makes consumers and regulators increasingly uncomfortable. So does the fact that some disclosures lack important information that would help consumers make educated decisions about their transactions.
The federal trade commission is monitoring the situation and has sent warning letters to more than 60 companies – including 20 of the 100 largest advertisers – telling them they have failed to make adequate disclosures in print and broadcast ads.
The FTC says the unnamed companies:
• Failed to reveal terms attached to special introductory offers;
• Neglected to tell consumers they would be billed automatically;
• Made false advertising claims; and
• Did not disclose that product demonstrations had been altered.
In its letters, the FTC made clear to the errant advertisers that disclosures should be “clear and conspicuous” and asked them to report back on the measures they will implement to resolve these problems.
The FTC recently settled a case against the social media app Snapchat for deceiving users when it claimed that messages sent through the service would disappear quickly.
The complaint against Snapchat says the company also misled consumers about personal data collection, unauthorized sharing of that information and measures to protect itas customers’ data from misuse.
The regulator has been letting other businesses know that, just because they have not received the warning letter, they should not assume that their disclosure practices are adequate.
The commission is advising businesses to follow “the four P’s” – prominence, presentation, placement and proximity – when disclosing their terms and conditions.
In the meantime, Houston BBB recommends that you read disclosures for all transactions, contracts, trials and website registration and look for information about opting out of information sharing.
You should carefully consider whether a free or paid service is worth the hidden cost of revealing your personal data collection, storage and distribution to other parties.
Jordan Rzad is the senior director responsible for internet marketing at Houston Better Business Bureau.