November 14, 2024

Shortcuts: Novel-Length Contracts Online and What They Say

Of course, this is nothing unusual. Most of us do similar things almost every day, largely without thinking about it.

“We’re routinely giving up our right to sue,” said Margaret Radin, professor of law at the University of Michigan and author of “Boilerplate: The Fine Print, Vanishing Rights and the Rule of Law.” “As a society we accept this as the price of doing business,” Professor Radin said.

Boilerplate contracts – which mean they contain standardized language, often in fine print – can apply in many different circumstances. But consumers typically come across some more than others, like the terms and agreements we click on when buying or using something online, and waivers, like the one I signed for the white-water rafting adventure.

First, about online contracts. If you’re beating yourself up for not reading them, don’t. Almost no one does. James Gibson, a professor of law at the University of Richmond, looked at contracts consumers needed to agree to — by clicking on them — to get software running for computers bought from four major sellers.

All the contracts, he said, “were an average of 74,000-plus words, which is basically the length of the first Harry Potter book.”

Florencia Marotta-Wurgler, a professor of law at New York University, has gone a step further and actually read contracts and privacy policies. Her findings: They don’t vary much from one another, even in competitive marketplaces, and, not surprisingly, they tend to benefit the seller.

She has also tracked how many consumers actually click on online contracts and spend more than one second there.

“It’s one in one thousand,” she said.

So online contracts are long and dense and basically no one reads or understands them. But, they serve a purpose, says Jessica R. Friedman, a lawyer who writes such contracts.

“The company is trying to limit its exposure” to lawsuits, she said. “There’s a tendency to think ‘big bad company and poor consumer,’ but there’s a lot of crazy people out there, and consumers who have unrealistic expectations. The contracts are a way to reach lots of people and protect yourself.”

Ms. Friedman admits that even she doesn’t read the terms of agreement for everything she buys online, even though she writes them. But, she said, if you’re spending a lot, you should.

Know the return policy. Know if there is a restocking fee. And understand that when you click on the little box that says you agree to these terms, it has some meaning.

“If I’m going to get a great deal on a ski jacket, but the terms say I need to return within 30 days and it’s July, so I’m not going to ski for six months, I need to know that,” she said.

And even though virtually everyone agrees that the idea of mutual consent with these types of contracts is a fiction, not all agree the system should be changed.

“I’m not someone who wags his finger and says you should read them,” said Douglas G. Baird, a professor of law at the University of Chicago. “If you read them, you don’t have a very interesting or productive life.”

But, he said, boilerplate contracts, in many cases, are just part of the many features that come when you buy a product. “They are a way a manufacturer has to connect the terms to the product,” he said, and absent a good alternative, our current system works pretty well.

“There are plenty of victims of boilerplates,” Professor Baird said, but wrongdoing is less likely to occur in the mass market than in specialized markets, such as those who take on payday loans or rent to own. That, he said, is where we should focus our concern.

Of course, many disagree with Professor Baird.

Article source: http://www.nytimes.com/2013/07/13/your-money/novel-length-contracts-online-and-what-they-say.html?partner=rss&emc=rss

Bucks Blog: Computer Snag Limits Insurance Penalties on Smokers

A computer glitch involving the new health care law may mean that some smokers won’t bear the full brunt of tobacco-user penalties that would have made their premiums much higher — at least, not for next year.

The Obama administration has quietly notified insurers that a computer system problem will limit penalties that the law says the companies may charge smokers, The Associated Press reported Tuesday. A fix will take at least a year.

The problem relates to the computer system where insurers submit their “qualified” health plans to be offered on the new exchanges where individual insurance plans will be sold beginning Oct. 1.

“This is a temporary circumstance that in no way impacts our ability to open the marketplaces on Oct. 1, when millions of Americans will be able to purchase quality, affordable insurance for the first time,” said Joanne Peters, a spokeswoman for the Department of Health and Human Services, in an e-mailed statement.

Starting in 2014, the law requires insurance companies to accept all applicants regardless of pre-existing medical problems. But it also allows them to charge smokers up to 50 percent higher premiums to ward off bad risks. For an older smoker, the cost of the full penalty could be prohibitive.

The underlying reason for the glitch is another provision in the health care law that says insurers can’t charge older customers more than three times what they charge the youngest adults in the pool.

According to a June 28 guidance from the government to insurers quoted by The A.P., “Because of a system limitation … the system currently cannot process a premium for a 65-year-old smoker that is … more than three times the premium of a 21-year-old smoker,” the guidance said. If an insurer tries to charge more, “the submission of the (insurer) will be rejected by the system,” it added.

Ms. Peters said in her statement that the problem is temporary. For 2014 only, “tobacco ratings across age groups cannot produce premiums that are more than a three-to-one ratio,” she said. “In 2015 and beyond, the system will expand to allow issuers to increase this ratio, if they choose to do so.”

Older smokers are more likely to benefit from the delay, experts say. But depending on how insurers respond to it, it’s also possible that younger smokers could wind up facing higher penalties than they otherwise would have.

The glitch could mean that insurers could charge all smokers the maximum allowable surcharge to get around the ratio problem, which would end up penalizing younger smokers with higher penalties than they might otherwise have received. But it is unclear what insurers will do.

“‘We are aware of the issue,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, an insurance industry group. “But I can’t speak to how insurers will respond to it.”

He said he was unaware of any estimates of how many people would be affected by the law’s insurance smoker surcharges.

Premiums for a standard “silver” insurance plan would be about $9,000 a year for a 64-year-old nonsmoker, according to the online Kaiser Health Reform Subsidy Calculator. That’s before any tax credits, available on a sliding scale based on income.

For a smoker of the same age, the full 50 percent penalty would add more than $4,500 to the cost of the policy, bringing it to nearly $13,600. And new tax credits available to help pay premiums cannot be used to offset the penalty.

The administration is suggesting that insurers limit the penalties across all age groups. The guidance document from the Department of Health and Human Services used the example of a 20 percent penalty for young and old alike.

In that case, the premium for a 64-year-old would be about $10,900, a significant cut from the $13,600 if insurers charged the full penalty.

Workers covered through job-based health plans would be able to avoid tobacco penalties by joining smoking cessation programs, because employer plans operate under different rules.

Article source: http://bucks.blogs.nytimes.com/2013/07/10/computer-snag-limits-insurance-penalties-on-smokers/?partner=rss&emc=rss

In Cable Niches, Less Reality and More Original Shows

Now, for the first time, she is in charge of a one-hour drama, but it is not for any network she envisioned earlier in her career. It is for VH1, the older-skewing version of MTV.

Niche cable channels like VH1 that have depended solely on unscripted programs or repeats of others’ scripted programs are now trotting out their own comedies and dramas. Their aim is diversification. When Ms. Littlejohn’s drama, “Single Ladies,” has its premiere late this month, “it’ll distinguish VH1 amid their steady diet of reality shows,” she said.

Top-tier cable channels like USA and TBS have been creating dramas and sitcoms for more than a decade, but now relative small fry are doing the same. The shows are a way to stay competitive.

“I think the bar has been raised in scripted,” said Jennifer Caserta, the general manager of IFC, the Independent Film Channel, which may be better known now for the sitcoms “Portlandia” and “The Increasingly Poor Decisions of Todd Margaret.”

The trend toward more scripted cable shows has been evident at advertiser presentations by VH1, IFC and other channels this spring.

Cable channels are in the middle of the upfront advertising period, when they secure commitments for ad spending for the rest of the year.

Channel owners like Scripps Networks and Viacom have forecast big gains in the upfront period this year because ratings continue to drift toward cable and away from broadcast, and the advertising marketplace is rebounding. Cable ad time, which is generally less expensive than broadcast ad time, is expected to grow faster than broadcast.

The cable and broadcast marketplaces “seem well positioned for truly strong results,” the News Corporation chief operating officer, Chase Carey, told investors last week.

For small channels, scripted shows are centerpieces that can be displayed to advertisers — and can command premium advertising rates.

“More scripted shows, more incredible performances,” screamed a banner at the presentation last month by the cable channel BET, which has struck ratings gold with scripted comedies and is looking for its first drama project. Often, though not always, scripted programs are perceived to be safer harbors for advertisers than reality programs. Bhavana Smith, a vice president at Draftfcb, an advertising network owned by the Interpublic Group, called scripted a “more controlled environment” for brand integrations.

“Do you really want to rely on Snooki to do justice to your brand?,” she asked, referring to a “Jersey Shore” cast member.

At IFC, the Cheetos snack brand was featured on the most recent season of “Portlandia” and the Jameson whiskey brand was featured on “Todd Margaret.” Ms. Caserta said each companies’ advertising “is humorous in itself, so incorporating them into our scripted comedies was easy.”

Most cable channels still subsist largely on so-called reality shows. They are generally less expensive to produce than scripted shows, and they are generally repeatable dozens or even hundreds of times.

But there are advantages to having an original scripted show on the schedule. Such shows convey status — they can define a channel’s identity, help to deliver higher per-subscriber fees, and impress executives at the parent company.

In other words, sometimes it is about ego.

Small channels like AMC, with “Mad Men” and “Breaking Bad,” and TV Land, with “Hot in Cleveland” and “Retired at 35,” have provided something of a blueprint for others. BBC America, for instance, is developing its own dramas to supplement what it imports from Britain. With the trial in scripted television can come error. CMT, the country music channel, last month canceled its first sitcom, “Working Class,” due to low ratings.

Article source: http://feeds.nytimes.com/click.phdo?i=172d26973dc27d7221548b1ef73f3373