What It Really Means When Companies Update Their Terms (And Why You Should Care)
My bank sent me an email last week, telling me that my Terms and Conditions had changed. I almost deleted it. Almost.
The saving of that little choice were 35 dollars a month. Hidden in section 12.4 was the addition of a new monthly fee on accounts below 1,500. Unless I read it, I would have been paying out of pocket to the tune of 420/year without understanding why.
The majority of the population disregards these messages. I used to be one of them. Being a paralegal and, currently, a lawyer, I have witnessed the consequences of individuals clicking on I agree without reading it. Spoiler: it rarely ends well.
Why Companies Change Their Terms
Companies do not revise terms out of whim. Their business, or the law, or both, something changed.
Common reasons include:
New fees or charges. This is the big one. Firms are aware that the majority of the population will not read the notice, and they will quietly slip in some new costs. I have done this with streaming services, credit cards, and phone plans.
Changes to dispute resolution. Arbitration has replaced lawsuits in many companies. This restricts your choice in case of something wrong.
Data collection updates. The amount of information collected by apps and websites is steadily growing. Location, contacts, and browsing history are fair game provided you consent to the same.
Liability limitations. Companies also provide language that shields them when things go wrong or fall apart. Do you remember that fitness watch that made people have rashes? The new terms incorporated health disclaimers.
Service modifications. They may drop features, modify the workings of the product or discontinue support on older versions.
One client presented me with an update to a credit card agreement. The company altered the calculation of the interest rate. Overnight, her rate increased to 24 percent. It took her three months to notice. That is an additional 180 in interest she paid.
The Legal Reality
What most people do not know is that these updates are legally binding.
By continuing to use a service, you have accepted its new terms when you receive a notice of terms update. This is what courts refer to as acceptance by continued use. I have witnessed judges enforcing clauses that individuals purported never to read.
One case stuck with me. A woman had been riding a rideshare app over time. They revised their terms to incorporate forced arbitration. She got in an accident. She attempted to file a lawsuit, but the court ruled against it, explaining that she had accepted the arbitration by opening the app after receiving the notice.
The kicker? She was allowed 30 days to decline arbitration by letter. She never knew.
Red Flags to Watch For
Some changes matter more than others. Here’s what I look for:
Payment and billing changes. Any mention of “fee,” “charge,” “billing cycle,” or “payment method” needs your attention. Read those sections twice.
Your rights during disputes. Find such terms as arbitration, class action waiver, governing law, or jurisdiction. These dictate what occurs in case of a problem.
Data and privacy updates. When they are gathering new information or bringing it to the partners, you are supposed to know. I have witnessed apps sell user information to hundreds of businesses.
Automatic renewals. Businesses rejoice at the auto-renewal billing. You may believe that you are on a month-to-month basis when you find yourself signed up for a year.
Termination rights. Will they terminate your service unannounced? Are you allowed to go free of punishment? These terms protect you.
One friend registered for a free trial of software. The new clauses transformed the one-click cancellation procedure into a certified letter sent via mail. He forgot to cancel. When he realized, he had bought six months at $79 apiece.
What Actually Happens If You Ignore Updates
To be frank, there is nothing dramatic most of the time. Companies revise terms on a regular basis. You are unable to read all of them.
But disregarding them is dangerous.
Financial risk. New fees add up. I once computed that the typical citizen spends 200-300 dollars annually on fees they are unaware of.
Legal risk. You may waive the privilege to sue or bring class actions. When a business flops, you desire alternatives.
Privacy risk. Your data may end up where you do not want it to. I have served clients who were located in marketing lists, sold without their awareness.
Service risk. Characteristics that you are used to may vanish. Cloud storage limits shrink. Streaming libraries change. Unless you read updates, you will never know until the last moment.
One of my colleagues employed a cloud backup service in his business. The data retention policy was changed to 90 days for deleted files instead of unlimited. His computer crashed. He lost six years of customer records since the deleted files were erased after 90 days.
He never read the email.
How to Actually Manage This
You don’t need to read every word of every update. Here’s my system:
Sort by importance. Priority is given to financial services, healthcare, and data-intensive applications. Random game apps? Less urgent.
Search for key terms. Open the PDF or webpage. Hit Ctrl+F (or Cmd+F on Mac). Search for: fee, arbitration, terminate, privacy, share, collect, liability.
Check the summary. A majority of notices have a section on what is new at the top. Read that first. When something grabs your attention, look further.
Set a reminder. Put a note in your phone: “Review terms updates monthly.” Spend 15 minutes on the first Sunday of each month.
Use your rejection rights. Other updates will allow you to choose not to do something or even shut down an account without being fined. Choose that as you are not fond of the changes.
I maintain a folder in my email of these notices. I skim them at least once a month, and spend around 20 minutes doing so. It is tedious, but I have already received three fee hikes, two privacy expansions, and one arbitration clause this year alone.
When You Should Push Back
Sometimes you can reject changes or negotiate better terms.
Financial services often allow opt-outs. Banks, credit cards, and investments often provide 30-60 days to decline any changes and leave your account without a charge.
Subscriptions might grandfather old users. When you complain of a price hike or a feature cut, customer care occasionally retains you on the previous one.
Data collection can be limited. Numerous applications allow you to choose not to track or share something. You only need to locate the settings.
Business accounts have leverage. When you are a paying customer or a company representative, you can most of the time negotiate. I have heard of businesses receiving custom terms.
A female contact approached me regarding the terms update of her insurance company. It included a provision that restricted coverage to some treatments. I assisted her in writing a letter declining the changes. They continued to employ her on the old conditions for one more year.
Real Consequences I’ve Seen
A college student was one who used a payment app. Terms revised to permit the company to freeze accounts during investigation. During the week of finals, his account was frozen. All his money is locked up. It took 12 days to resolve. He missed rent.
A project management software was used by a small business owner. The words were modified to assert ownership of user-created content to be used in marketing. His client presentations were used by the company in their advertisements without permission.
One of the retirees possesses a medical alert device. Words revised to a 90-day notice to cancel. They billed her three months more, $ 267, when she needed to change providers.
These aren’t rare cases. They happen every day.
What Companies Hope You’ll Do
Nothing. Hopefully, you will forget the notice.
Terms updates are purposefully small fonts, legal language, and lengthy documents. They are hoping that you will accept without reading.
I even went through the terms update of 47 pages. The actual changes? Pages 12, 23, 31, 39, and 44 contain seven scattered sentences. It took me 30 minutes to find them, and I make my living.
Companies know the numbers. Studies indicate that more than 9 out of 10 accept unread terms. They shape the process based on that fact.
Your Action Plan
Here’s what to do right now:
Check your email. Search for “terms” or “privacy policy” from the last six months. See what you missed.
Read your current terms for critical services. The most important are bank accounts, credit cards, health insurance, and phone plans. There is no need to memorize them. Just know the basics.
Create an alert system. Once a terms notice has been received, highlight it. It can be set aside some time that week to review it.
Ask questions. In case of confusion, call customer service. Get things straightened out.
Vote with your wallet. When a company changes something you dislike, and they are not willing to negotiate, move providers.
My streaming service revised its terms last month to restrict the sharing of passwords. I read the notice. I didn’t like it. I called them. Three months at half price, they offered me to stay. I took it.
Would it have occurred had I ignored the email? No chance.
The Bottom Line
Updates to terms and conditions are not thrilling. They’re not fun to read. But they own your rights, your money, and your privacy.
You don’t need to become a lawyer. You don’t need to read every word. You just need to pay attention when it matters.
Fifteen minutes a month. That’s all it takes.
I’ve saved clients thousands of dollars and countless headaches by catching term changes early. You can do the same for yourself.
Next time you get that email, “We’ve updated our Terms and Conditions”, don’t delete it.
Take five minutes. Skim it. Look for the red flags.
Your future self will thank you.
Frequently Asked Questions
Can I reject terms and conditions updates?
Sometimes. Financial services will also usually allow you 30-60 days to close your account as a result of rejection changes. In other services, you either have no choice but to quit the service. Confirm the notice about opting out.
Are terms updates legally binding if I don’t read them?
Yes. Courts have held that the mere fact that you still used a service after being given notice of the changes in terms amounted to acceptance, despite you not having read the changes.
How long do I have to respond to a terms update?
This varies. Most firms issue 15-30 days’ notice before changes are implemented. Some give 60 days. The notice shall state the effective date.
What happens if I don’t accept the new terms?
You may have your account closed or suspended. Some businesses allow you to stick with reduced. See what your options are by reading the notice.
Do I need a lawyer to understand the terms updates?
Not usually. The majority of amendments concern charges, conflict resolutions, or privacy. Pay attention to areas with such topics. When it comes to a lot of money or rights, it is reasonable to refer to a lawyer.
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