By: Allan M. Siegel
Online shopping is a pervasive part of our everyday culture. We use the web to buy gifts, trade stocks, and subscribe to services. Each time we use the web to purchase an item or service we must click "yes" to agree to accept the merchant's terms and conditions. These terms and conditions are designed to turn a profit, but they are also most often written to be fair. On occasion these terms and conditions are camouflage for a scam, and a recent court ruling from the Court of Appeals for the Ninth Circuit put an end to one of these scams in Lee v. Intelius.
Donovan Lee, a plaintiff in a class action lawsuit in Seattle, Washington, used the Intelius service to purchase a background check. In doing so he was also roped into a scheme to charge his credit card for a monthly "Family Safety Report." The language containing these terms was hidden in faded font, and would not have been obvious to the normal consumer. To make matters worse the terms also contained an arbitration clause, meaning that if Mr. Lee had any dispute regarding the terms he would be forced to arbitrate and could not pursue a claim in court. So, not only was he getting charged a monthly fee he did not sign up for, but he also could have his day in court.
The court held that it was unreasonable to bind a consumer to an arbitration clause or to the service of the monthly subscription because "even an exceptionally carefully consumer would not have understood" the terms he was agreeing to. This case may be appealed and other circuits may offer conflicting opinions, but it satisfying to know that in this case the legal system properly protected the rights of the average consumer against corporate greed.