Always Read the Fine Print: A Lesson Learned

September 11th, 2013 by

This blog is written by our law summer student, Ira Marcovitch.

It is a contractual maxim nearly as old as the concept of a contract itself: always read the fine print. Often thrown back at banks and lenders for their use of hidden terms and conditions, it seems that the proverbial tables have turned and one Russian man has struck a blow on behalf of bank customers worldwide.

Always Read the Fine Print A Lesson LearnedOn a day like any other, Dmitry Argarkov was perusing his mail when he came across an unsolicited letter from his bank, offering him a credit card. After reviewing the terms and conditions and being totally unsatisfied, he didn’t simply throw the letter away.

Instead of simply ignoring the letter, Mr. Argarkov scanned the credit agreement into his computer, altered the terms of the contract, and sent it back to Tinkoff Credit Systems, one of Russia’s largest credit card providers. According to Tinkoff, the terms that Mr. Argarkov included in the agreement were a tad more favourable than those originally proposed. They included an unlimited line of credit, no annual fees, and a 0% interest rate. Further, the bank would incur fines entering the tens of thousands of dollars should the bank violate the terms of the agreement.

When Tinkoff received the application, it apparently didn’t bother to check the terms of the agreement. It was signed by a representative and Mr. Argarkov was sent a credit card. When the bank finally caught on, it sued Mr. Argarkov. In a delightful twist, the bank relied on an argument that is all too often heard from borrowers who get caught in unfavourable contracts: we simply didn’t read the fine print. However the Russian court ruled in Mr. Argarkov’s favour. Though it ordered him to pay his outstanding balance of $575, it waived all of the other fees.

But Mr. Argarkov wasn’t done with the bank, yet. His contract called for a termination fee of nearly $180,000 plus approximately $90,000 for every violation of the credit agreement, and  he is now suing the bank for $730,000.

While one can only admire Mr. Argarkov for his creativity, and one can’t help but chuckle at the bank being hoisted by its own petard, these events highlight an important lesson for everyone entering into an agreement – multinational bank or sole proprietor, always read the fine print.

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