Don't just sign: Treat every contract like it’s full of traps - Wendy Knowler

On The Money Show this week, consumer journalist Wendy Knowler revisits the thorny issue of consumers signing contracts that later come back to bite them.

Along with people not reading what they sign, her biggest frustration is those companies and salespeople who know full well that clients do this and take advantage.

When dealing with an established, reputable company, she says, this bad habit on the part of consumers is mainly because they trust that what the salesperson disclosed to them will be replicated in the contract wording.

Or that things that were not disclosed, WON’T be in the contract.

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"The salespeople know that when the sign-ups happen face-to-face, there will be no record of what they did and didn’t say – only the contract which the customer signed will stand as witness to the agreement."

And the aw is on their side, with the Banking Ombud pointing out that our courts have handed down judgments over the years indicating that 'a party that signs a document without reading it, assumes the risks'.

Knowler relates the case of Cedric, who went to The Sneaker Factory in Mitchells Plain in Cape Town, to buy a pair of New Balance trainers for R1,400 cash. The salesperson offered him a R140 discount if he opened a TFG account, which sounded like a great deal.

He paid for his purchase in full online that same day, but checking his accounta few days later was shocked to find a R197 balance.

When he queried this, he was told it was for funeral insurance and magazine subscriptions.

Cedric admits that he did not read the documents he signed, but swears these things were never mentioned during the sign-up process.

"When I took this up with TFG, the company insisted Cedric agreed to all these extras, which included a Platinum Club membership for R60 a month, Jet Club for R48, SportsClub Digital for R30, a Funeral Plan for R55, a Legal Plan for R60, and a Fraud Alert service for R4.50."

All these 'extras' totalled R257.50 a month!

After he complained, TFG reduced his balance to R137.98 and called it 'resolved', but Cedric felt misled.

While he knows he should have read the contract, he feels the salesperson clearly took advantage of his trust.

Knowler says she keeps urging corporates to find ways to counteract this kind of thing - for instance to design their contracts so that customers re FORCED to initial next to the tricky bits in the contract – like the Value-Added Products on retail accounts, the balloon payments and step payments on car purchases, and so on.

For now though, it is up to YOU to protect yourself.

Knowler's advice:
Treat every contract like it’s full of traps, because it might well be. Take your time to read every line, whether it’s on paper or a screen. If something’s unclear, ask questions - don’t just trust the salesperson, who is probably going to earn a commission for signing you up.

And when it comes to those phone sales, remember it can be tricky to get hold of a call recording from the company, so download an app on your phone and record all sales calls yourself.

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To listen to Wendy Knowler in conversation with Stephen Grootes on 702's The Money Show, click on the audio link below: