Question

This is a post first discussion forum. Please respond to the following scenario: A Question of Ethics-Consumer Rights. Best Buy, a national electronics retailer, offered a credit card that allowed users to earn "reward points" that could be redeemed for discounts on Best Buy goods. After reading a newspaper advertisement for the card, Gary Davis applied for, and was given, a credit card. As part of the application process, he visited a Web page containing Frequently Asked Questions as well as terms and conditions for the card. He clicked on a button affirming that he understood the terms and conditions. When Davis received his card, it came with seven brochures about the card and the reward point program. As he read the brochures, he discovered that a $59 annual fee would be charged for the card. Davis went back to the Web pages he had visited and found a statement that the card "may" have an annual fee. Davis sued, claiming that the company did not adequately disclose the fee. [Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152 (9th Cir. 2012)] (See Business Ethics.) 1. Online applications frequently have click-on buttons or check boxes for consumers to acknowledge that they have read and understand the terms and conditions of applications or purchases. Often, the terms and conditions go on for so long that they cannot all be seen on one screen, and users must scroll to view the entire document. Is it unethical for companies to put terms and conditions, especially terms that may cost the consumer money, in an electronic document that is too long to read on one screen? Why or why not? Does this differ from having a consumer sign a hard-copy document with terms and conditions printed on it? Why or why not? 2. The Truth-in-Lending Act requires that credit terms be clearly and conspicuously disclosed in application materials. Assuming that the Best Buy credit-card materials had sufficient legal disclosures, discuss the ethical aspects of businesses strictly following the language of the law compared with following the intent of the law.

Answer 1

1.At the outset,there does not seem to be any ethics violation, as Davis himself has agreed, that the web document suggests that there is the possibility for an annual fee.

Even, if the electronic document is too long to read & understand in one go--the same is the case with written hard-copies also--where we come across share applications , which run to pages in minute prints.

It is common prudence for a person applying for such as these, to know where to look for , for gathering certain informations--so as not to miss out on any monetary numbers--that may arise at a future date , before signing.

That too with frequent check-boxes in all such online-deals, the purchaser can stay alert , before finally accepting.

As all the terms of the contract are enlisted in the web-available page of the company,the issuing company can take legal -correctness-rescue by citing their impression that the customer had not come up with any query--so he has agreed to all that had been printed on the web-page.

That said, the web-designed page , for establishing a contract, is no diffferent from signing a hard-copy---as they are also going to honor your credit payments , on on-line basis only-- without waiting for any written & signed document from you.

2.The intention behind the Truth in Lending Act , is that the customer must take an informed decision--ie. Decision taken after being fully aware-- in letter & spirit--of all the relevant costs & consequences, before entering into the credit-card scheme.

The Act also recognises the right of recission by the customer requiring credit/loan , within three days after signing , if at all that was done under pressure from the other party.The former can think over & be clear , if at all he wants this credit-card arrangement /loan , or not.

So, under this act,

even if Davis had genuinely missed the annual fee requirement ,disclosed by Best-Buy & the latter being legally correct,

as per the intent of the Truth in Lending Act , Davis ,having agreed ,being not fully aware of the import of the contents of the web-document --can have recourse under this Act.

It is only ethical , to discharge Davis from this contract , as he contests the manner of disclosure of the annual fee, which had gone unnoticed by him.