Retailers Can Put Anything In A User Agreement, But There’s A Huge Catch
Written by Mark RaschAttorney Mark D. Rasch is the former head of the U.S. Justice Department’s computer crime unit and today is a lawyer in Bethesda, Md., specializing in privacy and security law.
I recently received a $25 debit card as an honorarium for giving a speech. To “activate” the gift card from GreenDot.com, I had to give them my name, address, telephone number, Social Security number, user ID, PIN, and answer to three security questions – all that just for 25 bucks. In fact, what I really did was to open a bank account with $25 and a monthly maintenance fee of $4.95. I apparently agreed to all of this on the website of GreenDot.com under their terms of service. But that’s not all I agreed to.
Years ago, I got a Wachovia stored value card, which similarly had outrageous fees – fees for putting money in, taking it out, checking the balance, loading the card, not loading the card, as well as an annual fee, monthly fees, etc. It amounted to usurious interest rates and fees of over 3000 percent. When I called to dispute one of the fees, the person on the other end told me that my wife (who had just handed me the phone) had authorized the fee–she did not, and I know this because I was standing right there.
It was then that the Wachovia representative told me that they had recorded the telephone call. When I informed them that neither my wife nor I had consented to the recording (in Maryland, like about a dozen states, all parties must consent to the recording), the Wachovia rep told me that they didn’t need consent because they were a federally chartered institution. Of course, the law makes no such distinction. This resulted in a class-action litigation against Wachovia (no, I didn’t initiate it) for unlawfully recording conversations without the requisite “this call may be monitored for quality assurance purposes.”
Related story: The NRF has now come out against arbitration, but only if it doesn’t involve retail customers. Then it’s glorious.
But now, GreenDot.com has gone one better. The user agreement, buried in pages of legalese, states that by activating my gift card, I have consented to their monitoring, recording or using the contents of my conversations with them. In other words, even though the Legislature has made a determination that these calls should be private, absent consent, Green Dot has decided to get my consent as a condition of activating my card. Of course, I had no choice. I couldn’t not activate the card and ask for my $25 in cash, since I hadn’t bought the card in the first place. I could have returned the card to the sponsor and hoped they could get their $30 back (they had to pay a $4.95 fee initially). But I couldn’t get my personal information back.
Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code.
-Marc
