Just before Christmas, I received a letter
(C). Delighted -- I mean, no one bothers to write a real
letter anymore -- I ripped open the envelope. That's when things went off the rails.
Citi was writing to explain some changes on the horizon, or possibly already in effect, related to my credit card. The bank wanted to let me know that they were going to increase my rate, or already had -- I'm just not sure.
The letter began like this:
The Changes. We are changing your Card Agreement. The changes will be effective for all billing periods beginning on or after December 3, 2008. The changes will be effective whether or not you receive a billing statement.
Not the warmest of openings, but I continued:
I. We are changing how we calculate your variable APR for purchases:
We are increasing your variable APR for purchases. Your purchase APR will equal the US Prime Rate plus 10.99% with a minimum APR of 16.99%. As of October 1, 2008, this purchase APR is 16.99%. This APR equals a daily periodic rate of 0.0465%.
From here I skipped ahead a few paragraphs is search of an anchor of some sort, just a line or two I might understand. I found:
Default APR. All your APRs (including promotional APRs) on all balance may automatically increase to the default APR if you default under any Card Agreement you have with us.
That seemed vaguely threatening. Especially since, as stated, "The default APR equals the greater of (1) the Prime Rate plus 23.99% or (2) up to 29.99%."
No matter. Many years of receiving such letters taught me exactly what to do: tear the thing in half, toss it into the recycling bin and hope that Citi wasn’t planning to rip me off more than was already the case. I imagined thousands of other Citi clients doing pretty much the same thing, which was likely, says Deborah Bosley, principal of the Plain Language Group consultancy in Charlotte, NC. Unfortunately, she says, consumers have been trained to ignore incomprehensible bank letters about credit card agreements, personal loans, and other issues, regardless of the money-wasting consequences.
Bosley is on a crusade to wipe out doublespeak, and financial documents are her specialty. In recent years, she's been hired to deconstruct dense, legalese-ridden prose on behalf of institutions like TIAA Cref, Bank of America
(BAC) and KPMG. She's also a board member of the Center for Plain Language
, one of a handful of non-profit organizations that advocates for clear, reader-friendly letters in private sector and government literature. The group would like to help people like me understand official documents about health insurance, voting rights, or small loans -- and credit cards.
"We're getting information that is crucial to our financial life but is written in such a way that most of us not only don't read it but wouldn't understand it even if we read it," says Bosley.
General literacy isn't the problem, she emphasizes. Bosley herself has a Ph.D. in English and teaches English and Technical Communication at University of North Carolina Charlotte, but she finds it impossible to calculate a late fee using data found on the back of her monthly Wells Fargo
(WFC) credit card statement. Her colleagues at UNCC are scientists, doctors, and philosophers, and they can't understand their loan documents or credit card literature either, she reports.
"If you turn over the back of any credit card statement, it's very hard to tell what your daily balance is,” she says. “It's hard to understand the difference between your annual percentage yield and the interest rate itself, and difficult to know the conditions under which your rate would -- or frankly, will -- change."
Kicking Bad Habits
So are the banks trying to stick it to us? Are they using jargon, smoke, mirrors, and numerous abbreviations just to thwart our ability to switch providers, spend less, or pay down a large balance? “I don’t want to speak to intentionality,” says Bosley, who says she doesn't buy into conspiracy theories. With these riddle-wrapped-in-an-enigma letters, banks are likely just falling back on old habits, she believes. And over time, consumers have fallen into a rut of accepting what's put in front of them. “Anyone who has bought a house knows that you eventually just start listening to the person who says, ‘Sign here, here and here,' ” says Bosley. That same sort of mentality is now at work when we read bank literature.
"I'm not a psychologist, so I can't tell you whether people would change their behavior if they did understand the statements,” she adds. “But the very fact that we don't understand the information makes it much more difficult to change our behavior if we wanted to.”
President Obama’s administration appears to agree. Within his new package of regulations aimed at reversing the consumer credit crisis (see Six Things You Need to Know About Credit Card Reform
), the President has called for the banks to stop using gibberish. Last spring, when Obama first announced the initiative, he said
, “All the forms and statements that credit card companies send out have to have plain language that is in plain sight. No more fine print, no more confusing terms and conditions. We’re going to require clarity and transparency from now on.”
How banks will determine what “clarity” looks like -- or how the government will enforce the new rule -- is still anybody’s guess. To begin, says Bosley, banks could turn to an existing 77-page stylebook, the SEC Plain English Handbook
. It was created in 1998 under the watch of former SEC Chairman Arthur Levitt who wanted to do away with overly complex filings from public companies. Some of the handbook's basic rules:
- Ruthlessly eliminate jargon and legalese.
- Don’t create new jargon that’s unique to your document in the form of acronyms or other words.
- Use the active voice with strong verbs.
So far, so good.
From there, public affairs officials could test their letters using focus groups, or any one of a dozen strategies that can help bang a legal document into a recognizable shape, says Bosley. “If your test group doesn’t understand a letter, you rewrite it and test it again,” she says. That way the bank can say it legitimately tried to make itself understood.
But that’s probably not the way this plain language coup will play out, Bosley predicts. “My guess is that the banks and credit card companies will issue literature in what they believe to be plain language, somebody will not understand something, and there will be a lawsuit," she says. "Like everything else in our culture, it will take litigation before it's enforced.”
Believe it or not, she adds, there will be a silver lining for corporations should clear English become the norm. Studies show that companies that use plain language gain more business because of it. Clear communication inspires trust. (Bank of America may be early out of the gate with their “Commitment to Clarity
.” It applies to credit cards and mortgages, and it’s not perfect, says Bosley, "but it’s a start.")
There are also savings
to be had for companies who clean up their memos. “Let’s say my mother gets a letter from her bank that she doesn't understand. What does she do? She picks up the phone and calls them,” says Bosley, who knows of one financial institution that in a single week received 10,000 calls from clients frustrated by a particularly baffling letter. That’s a lot of staff time dedicated to cleaning up an avoidable mess.
For its part, Citibank says it plans to comply fully with Obama's new rules about language. Its statement to Minyanville read: "Our goal is to communicate credit card terms and changes in a clear way and provide customers with greater choice and more control. We always encourage any customers who have concerns or need to clarify any part of our communications to contact us directly."
The company is including an explanation of their new credit card statements in current mailings, while also directing clients to an interactive web page with information about Obama's new regulations and how Citi is responding.Take a Page From Buffett
Levitt's SEC handbook was printed with an introduction from Warren Buffett, who says, “For more than 40 years, I’ve studied the documents that public companies file. Too often, I’ve been unable to decipher just what is being said or, worse yet, had to conclude that nothing was being said.”
Buffett, who praised the handbook's mission, also suggested one “unoriginal but useful” tip: Write with a specific person in mind.
"When writing Berkshire Hathaway’s
(BRK.A) annual report, I pretend that I’m talking to my sisters. I have no trouble picturing them: Though highly intelligent, they are not experts in accounting or finance. They will understand plain English, but jargon may puzzle them,” he said.
That's good advice for the client communications team at Citi -- and all the big banks. Next time you’re writing to your thousands of clients, try creating a mental image of just one person reading your letter. Make it Buffett's sisters, your brother-in-law, your mechanic -- heck, make it me.Click here to see how one plain language specialist translated Citi's letter about increased rates.