In October 2010, Slate published an article online about payday lenders and a particularly egregious practice — one that went beyond the outrageous interest rates and failure to disclose fees. It all started with a site that promised to match borrowers with payday lenders.
Once borrowers had completed the online application, he or she would hit enter to be taken to a page that listed lenders that matched the borrower’s profile. First, a webpage listing special offers came up. Next to each of the four offers were two tiny radio buttons: “Yes” and “No.”
“No” was preselected for the first three. “Yes” was preselected for the fourth. Borrowers regularly missed that fourth button altogether and clicked the large “continue” button at the bottom of the page. With that one click, the borrower had agreed to purchase a debit card — with a $0.00 balance — for $54.95. The payment was then automatically deducted from the borrower’s checking account.
Needless to say, borrowers sued, and the Federal Trade Commission got wind of their complaints. Let’s hope that put an end to it.
Insurance companies and brokers have apparently used a similar trick to slide unwanted coverage onto online travel insurance purchases. The more things change, the more they stay the same.
On the insurance sites in question, the consumer must deselect a radio button if he or she does not want the additional coverage. If the button remains selected, the consumer ends up with the added coverage and the added premium.
Just as “not lying” and “telling the truth” are not always the same thing, not deselecting a radio button is not the same thing as giving your informed consent to coverage and the cost of coverage, the Florida Office of Insurance Regulation says. The state has been clear about this in the past: The consumer must affirmatively accept the coverage.
Even if the agent is acting on his own, without the knowledge or consent of the insurance company, the insurance company is liable for any wrongdoing committed when selling its products. It’s all part of being highly regulated — the state does not just monitor the company and the agents, it monitors how well the company monitors the people it appoints to sell its insurance.
As we said in our March 9 post, the OIR shared this information in a memorandum. To date, it doesn’t look as if the agency has taken action against any particular insurer. If consumer complaints continue to mount, though, that could change.
Florida Office of Insurance Regulation, “OIR-15-01M: Automatically charging consumers for ancillary travel insurance without consumers’ informed consent prohibited,” issued Feb. 3, 2015
Slate.com, “Legal Usury: The Skeevy Business of Payday Loans,” Timothy Noah, Oct. 5, 2010Share