18 April 2016
- Two thirds admit to signing contracts without reading paperwork
- One in four regret signing it immediately after adding their signature
- Instructions snubbed as many adopt ‘do now, understand later’ approach
Brits are risking destroyed dinners, faulty furniture and even financial frustration as new research reveals we often fail to read the small print when it matters.
Despite the Nationwide Credit Card survey highlighting that 87 per cent of people claim to be naturally suspicious and a further 91 per cent believe ‘things aren’t always as they seem’, two thirds of Brits (66%) admit to not always reading or never having read a contract before they sign. Credit card is the most likely financial product to be taken out without checking the terms and conditions.
Nationwide’s survey also highlights how more than half of people (51%) have attempted to use electronic gadgets and devices without reading the instructions, while around a quarter (24%) have struggled on with assembling flat-pack furniture and one in five (22%) ruined dinner after not taking note of cooking instructions.
The research of 2,000 UK adults was commissioned to better understand more fully how people make decisions. This follows a number of positive changes Nationwide has made to its own credit cards to ensure they are simpler and easier to understand. As part of its transparency campaign, Britain’s biggest building society is calling on other credit card providers to make their products more customer friendly.
According to the poll, nearly a fifth of people (18%) have taken out a credit card without glancing at the contract, while 17 per cent have done the same with a mobile phone contract. Just six per cent however have joined a gym without going through the paperwork.
The result of not understanding what we’re signing is that a quarter of Britons (25%) regretted signing a contract immediately after doing so, while more than a fifth (22%) have been hit with a fee for exceeding the limit on their credit cards. In addition, around a fifth of people (19%) do not understand the associated fees and charges with a credit card.
John Crossley, Nationwide’s Head of Credit Cards and Personal Loans, said: “The research shows that many of us fail to take the time to understand our action before we make commitments. It’s one thing to incinerate a microwave meal by ignoring the instructions, quite another to be blindsided by a fee or penalty. We would always urge people to check any paperwork carefully or ask questions if at all unsure.
“We would like to see the industry also begin stripping away some of the complex and vague rules surrounding credit cards. Not simplifying the way they are structured will continue to confuse and irritate people in equal measure. This would send a reassuring message that the interests of the customer are being put at the front of the queue.
Nationwide has a history of doing the right thing for its credit card customers. These have included:
- In March, Nationwide bucked the industry standard by honouring the full balance transfer period from the day the transfer is made within the first three months window – meaning no time will ever be lost. The process normally starts the day the account is opened.
- As part of the same improvement, customers now benefit from the full length of any introductory purchase offers. Customers are given an additional month interest free to take into account the time for the card to be posted – usually only a couple of days.
- In January, Nationwide pledged not to increase customers’ credit limits without their permission. The Society also amended statements to make them clearer and easier for customers to understand. People can now see how much interest is being charged on each part of their balance.
- In a change made last April, customers aren’t automatically charged interest on the full amount of additional purchases during a balance transfer period if they settle the purchase at the month end.
- Also last April, Nationwide removed the fee for customers exceeding their agreed limit.
- Nationwide became the first major provider to offer a positive order of payments, meaning the most expensive debt is paid first. This has since been introduced as standard practice by the regulator.
- The Society offers a grace period when customers miss a payment during an introductory purchase offer, whereas other providers end the introductory deal at that point.
- Soft quotes can be accessed at the credit card application stage, meaning customers receive their credit limit and APR prior to getting a full quote, which impacts credit scores
- The same deals are available regardless of whether applying online, over the phone or in branch.