Editor’s Note: How much do you know about what companies do with your data? Perhaps you don’t care who sees it, because you think you have nothing to hide. But as corporations store massive troves of data, they know more about our behaviors, wants and needs. And with that information they can control our spending decisions before we’ve even taken out our wallets.
“All You Can Pay,” written by Anna Bernasek and D.T. Mongan and published on May 26, will have you rethink the way you share information with corporations. The following is a direct excerpt from chapter six. Bernasek and Mongan warn of the proliferation of fine print, of user agreements so long no one in their right mind would read it, of purposefully vague wording so as to mislead you and your pocketbook. Tomorrow, we’ll post another excerpt from “All You Can Pay” on the end of the free market as we know it.
A little button to the side of an article you’re reading about health and wellness on the Mayo Clinic website catches your eye: Lose up to six to ten pounds in two weeks by following the Mayo Clinic diet, based on the New York Times best-selling book. It’s intriguing. After all, you’ve wanted to lose ten pounds for a while now and nothing seems to work. If anyone should have good advice on diets, it should be the Mayo Clinic. It’s one of the leading medical authorities in the world.
So you click the button. What the heck, it can’t hurt, and you may learn something useful. Next you wind up on a page where you can get your “free diet profile.” Big letters across the screen promise “the last diet you’ll ever need.” All you have to do is fill out your age, weight, and height and answer a few questions. You know that selling diets is like selling snake oil but come on, this is the Mayo Clinic. It’s among the most respected hospitals and medical care facilities in the United States. The Mayo Clinic brand is all about looking after people. If anyone has a diet program that isn’t just another rip-off, it ought to be the Mayo Clinic.
Trusting the Mayo Clinic’s reputation, you enter your personal information and click through the prompts. A series of questions appear before you can go any further. Do you ever watch TV while eating? What do you consider a serving size of pasta? The size of a hockey puck? Tennis ball? Or softball? What’s your biggest motivation to lose weight? Family? Health? An upcoming event? To look better? How active are you? What activities do you do? What’s the biggest obstacle to you losing weight right now? What health topics interest you right now? Based on your answers, the Mayo Clinic then recommends different types of newsletters that they produce and you can receive via e-mail. In order to go on, you have to sign up to receive them before you can create your “free diet profile.”
So you sign up for one or two newsletters. It’s free, right? Then you hit the button to create your profile. If you were hoping to find some answers, you’re disappointed. More marketing material appears about what you can learn from the Mayo Clinic diet, which has five main points: break bad habits, adjust food portions, look and feel your best, overcome emotional eating, and receive support from Mayo Clinic experts. All true, perhaps, but not what you expected. You thought you would get some specific ideas on how to lose weight. What does a diet profile mean, anyway? It’s vague enough that it might imply a lot of different things. But not to worry. An orange button near the bottom of the page says Start Losing Weight. All you have to do is click on it. Click on it and it takes you to a new page where you have to start an account and provide a credit card so that you can start losing weight today. “Join now and get your first 7 days free,” and in smaller print, “Just $4/week after that.” Well, you hadn’t expected to pay for anything. It did say free. But then you can always try it for seven days and cancel after that, right? You might get some really good ideas for losing weight and then you really won’t ever have to diet again. You enter your e-mail address and credit-card information. At the bottom of the page is a big button with a red Sign Up Now. Just on top in small print is the sentence, “By signing up you agree to the terms of service and billing policy.” And to reassure you that they take your privacy seriously is an image of a padlock with Comodo Secure written next to it.
If you read the fine print, you might think twice before signing up. But then, who has the time or the patience to read through the fine print? Most of it is legalese, anyway. But the fine print actually is informative for what it includes as well as what it doesn’t include. Perhaps the most interesting aspect is that even after reading the fine print, you can’t be sure of what you are getting. The only way to know is to sign up. The site actually makes no promises. It alludes to a personal diet plan, but is that really what you get? And without any extra costs? It won’t say. There’s a sidebar that lists many enticing things: “Get All the Tools You Need to Lose Weight: personalized meal plans, 100s of easy delicious recipes, simple portion control guides, motivational tips, healthy habit tracker, food and fitness journal, vitamin and nutrient log, personalized workouts, exercise guides and videos, walking and running guides.” Wow! That’s a lot of things, and it seems like by signing up that’s exactly what you’ll get. But it never explicitly says that. Do you really get everything you will need at no extra charge? That’s hard to believe, and yet it’s written to entice you into believing it. The bottom line is that there’s no way of knowing what you get until you give the Mayo Clinic your credit-card information. What becomes clear from reading the fine print is that your costs might easily be more than you expect. Look carefully at what the Mayo Clinic writes in the fine print about the Mayo Clinic diet:
The Mayo Clinic Diet’s online program is yours FREE for 7 days! You will not be charged during your free trial period. However, valid payment information is required. If you’re happy with your online membership, do nothing. Your service will continue uninterrupted, and you will be enrolled under our standard membership agreement. Online membership is just $4 a week, billed in advance quarterly (every 13 weeks). The charge will be applied to the same account you provide at sign-up. You may cancel before your free trial ends at no charge, or at any time afterward and you will continue to have access to your account for the remainder of your term.
First, don’t forget, this was advertised as a two-week program. So any decision to end it in seven days will probably not deliver the results you were looking for. Second, how do you cancel it? There’s nothing that says exactly how you go about canceling. And that’s not uncommon these days. Websites can make it difficult to cancel a customer agreement although signing up is quite easy. Some go to extreme lengths, and you have to first find a phone number that is not easily found on the website. You might be placed on hold for what seems like ages before a representative will speak with you. And in many cases you are quizzed about why you want to terminate the relationship. It’s not like the Mayo Clinic tells you how to cancel in its fine print. It could easily state, “You may cancel by pressing this big red button.” If the Mayo Clinic is really serious about giving you a diet that works, why doesn’t it let you sign up for seven days and then ask you to pay? If you love the program, why wouldn’t you pay? But on the other hand, if you sign up and are not impressed, you may very well forget or be too busy to cancel. Gotcha! Your free trial might not be free after all. Even customers who like the product may pay more than they think and use less of the product. The advertised price is four dollars a week. But customers pay for thirteen weeks at a time, in fifty-two dollar chunks. That gives you thirteen weeks of the “program,” although you still don’t know what it is. And remember, the original come-on said you can lose weight in two weeks. There’s no useful explanation of what you get for the money or during the “free” trial period. You have to pay in full for it, and if you want to cancel at any time during that thirteen-week period, you don’t get your money back. You do, however, get to keep using a service you’re not happy with and want to cancel until the thirteen weeks are up.
We may provide your Personal Information to service providers who work on our behalf or help us to operate our business, the Site and the Services. Examples of such service providers include vendors and suppliers that provide us with technology, services, and/or content for sending email, analyzing data, research, providing advertising and marketing assistance, processing payments (including credit card payments), and providing customer service. Access to your Personal Information by these service providers is limited to the information reasonably necessary to perform its limited function.
Whatever “reasonably necessary” means! That’s a lot of different companies with access to your personal information. But the bigger issue is what it terms “anonymous information.” There are no restrictions on sharing anonymous information. The difference between personal information and anonymous information is simple: It’s anonymous if it can’t be “reasonably” tied back to an individual person. That’s a huge loophole. The cookies that companies stash on your browser don’t identify you. They identify your browser. So the website can take the most sensitive and personal information it has and sell it to third parties along with the cookie data. Online, nobody needs to know your name. You show up online as a browser with cookies. And companies can use your personal data, linked to your computer through cookies, however they want.
Another thing to keep in mind is that there’s no longer any such thing as anonymous information. With the help of reidentification techniques, a large portion of online data can be traced back to individuals. And if all that isn’t enough, the website can change its policies and practices at any time without notice, and the changes will become effective immediately:
We reserve the right to change, modify, add or remove portions of this Policy at any time and without prior notice, and any changes will become effective immediately upon being posted unless we advise you otherwise. Your continued use of the Site or Services after this Policy has been amended shall be deemed to be your continued acceptance of the terms and conditions of the Policy, as amended. We encourage you to bookmark this Web page and review this Policy regularly.
The website helpfully recommends you spend your time monitoring its user policy for any changes that might be important to you. That’s a patently absurd suggestion. It would be a rare user who even reads enough of the policy to find the suggestion that he or she check back frequently. This is a diet-advice site, for heaven’s sake. Anybody who carefully monitors the fine print on a diet site in case it changes doesn’t need diet advice. Psychiatric help seems more appropriate. It’s clear that all the fine print was prepared by lawyers to protect the website. It’s not a real contract, in the sense that both parties understand what they are agreeing to. It’s a one-sided deal that typically is not even read by the consumer. The only time it will be referred to is if a problem arises later, in which case the website will pull out the policy and use it as a first line of defense, claiming that the customer agreed to its terms and that it is absolved from responsibility.
Step back for a moment to understand what the website has done. It has created a valuable list of the names and the e-mails of people who want to lose weight. Even if the website doesn’t sell that list to third parties, it has a rich source of prospects to whom it can sell future diet products and services. And if it doesn’t want to hand over the list, it can serve as a middleman between companies who want to market to weight-loss customers and the valuable list of prospects. It doesn’t have to share your information because that’s not necessary. Meanwhile, through the use of fine print, it has obscured the price of what it is selling as well as the product. This allows the website to potentially get more money from people interested in dieting than it would with a truly free sample or a straightforward selling proposition revealing the true cost. If you were a patient at the Mayo Clinic, the clinic would be prohibited from sharing your personal information with others. But on the diet site, you’re not a patient. There’s nothing stopping the website from using essentially all of its information in future solicitations or commercial dealings with you, including dealings on behalf of third parties. And there’s nothing stopping the website itself from using your information in any way for its own purposes.
The website that the Mayo Clinic licenses is not alone in using fine print to cover its tracks. It’s a standard business practice these days. Whatever you do, wherever you go, whatever you buy, consumers are confronted with an enormous volume of legal terms and conditions. No reasonable person reads it all, and in fact, it’s probably not even possible to do so.
Look carefully at loyalty programs, for instance, which are rich sources of fine print. They are easy to join and good at collecting data. But the hoped-for benefits can be harder to obtain. Often the advertised benefits of these programs are not well defined. CVS Pharmacy’s ExtraCare rewards program, for instance, advertises “coupons for instant savings,” but there are exclusions:
Some restrictions apply. ExtraCare card must be presented to get these savings. Savings applied to total purchase with specified product. Excludes prescriptions, alcohol, gift cards, lottery, money orders, postage stamps, pre-paid cards and tobacco products. No cash back. Tax charged on pre-coupon price where required.
As for your CVS ExtraBucks rewards, in which you’re promised to get 2 percent back from your everyday purchases:
Excludes alcohol, gift cards, lottery, money orders, prescriptions, postage stamps, pre-paid cards, tobacco products or items reimbursed by a governmental program. Customers must shop during the 45 day distribution period to receive their 2% and prescription ExtraBucks Rewards, which will be rounded down to the nearest $0.50. Members who do not spend $25 in qualifying purchases or who do not otherwise reach a minimum of $0.50 in ExtraBucks Rewards by the end of an earning period will not receive rewards and will not have earnings carried over.
But it goes on to exclude certain states and government programs and the like. Good luck figuring out whether you really are entitled to beneﬁts. The arrangement seems transparently designed to suggest that you will get special treatment while in fact delivering as little as possible. In business terms, companies try to maximize the perception of beneﬁts and minimize the actual cost.
Fine print is another useful tool for extracting the consumer surplus. All that legal language obscures both the price and what the customer actually gets, the product itself. Its purpose is to benefit the seller, and the seller has a key advantage. If you sell one product—take soap, for example—to lots of customers, it makes sense to hire a lawyer to write a contract that gives you lots of advantages. If, on the other hand, you buy hundreds of products from hundreds of sellers, it makes no sense at all to wade through all those legal terms. Consumers are asked to sign “contracts” written by sellers that the consumers don’t even read, much less understand and consciously agree to. Consumers only learn what’s in the fine print when it’s too late. It comes up when they complain or ask for something they thought they should have gotten, and the seller says no, pointing out a provision in the customer agreement.
But the proliferation of fine print is significant in another way too. It’s a catchall for taking advantage of customers. If you think companies won’t use the growing knowledge they have about you to extract higher prices, think again. In many small and big ways, companies already take advantage of your trust. With more sophisticated data extraction and analysis, exploitation will only get easier, cheaper, and more pervasive.