by Jeff Sovern
Many consumer laws require that businesses make "clear and conspicuous" disclosures. See, e.g., Reg Z, 12 C.F.R. 1026.17(a)(1) (closed-end loans). But increasingly, consumers are obtaining loans through mobile phones. How can any disclosure on those tiny screens be clear and conspicuous? When the Fed thought about this issue back in 2007, it took the position that “disclosures comply with the ‘clear and conspicuous’ requirement as long as they are provided in a manner such that they would be clear and conspicuous when viewed on a typical home personal computer monitor.” See Federal Res. Sys., Truth in Lending, 72 Fed. Reg. 63,462, 63,471 (Nov. 9, 2007). Its thinking was that lenders cannot control whether consumers read a disclosure on a desktop computer or a cell phone. But a lot has changed since 2007, not least of which is that much of the Fed's consumer protection function has been assumed by the CFPB, because Congress concluded the Fed had not protected consumers sufficiently (as the Fed's position on this matter may suggest). Another change since then is that consumers obtain online loans by downloading apps to their phones; with such apps, reading the disclosures on a desktop may not even be an option. In other words, lenders now can control whether consumers read a disclosure on their desktop computer or phone. So isn't it time to create disclosure rules for mobile devices? Or am I missing something?
this is a really important problem. I think it has real implications for the draft Restatement of Consumer Contracts. the draft Restatement would apply a standard of reasonable notice for determining if standard contract terms are incorporated into a consumer contract. But figuring out what is reasonable is going to depend in part on the media through which the consumer views the terms. It’s really difficult to know ex ante what’s reasonable given variations in screen size, OS, etc. Indeed, even the brightness settings of the screen might matter.