A variety of forces caused the recent financial crisis. One cause we don't hear much about is confusing language in contracts.
Some borrowers (and investors who bought complex instruments) didn't understand what they were getting into. Of course, some of them knew and ignored the risk - but others simply signed their lives away, trusting business partners and lenders to look out for their best interests.
Some consumer advocates are pushing for more plain English. While simpler disclosures won't eliminate problems, they're bound to help. If there's really a need for a complex phrase or term it should be allowed, but most agreements are unnecessarily complex.
The Plain English Campaign in the UK has been working at this for decades (or "for 30 years" if you prefer). Banks and financial institutions are not their only targets, but they're in the headlines this year.
It bears repeating: don't sign anything you don't understand - there's nothing wrong with asking. What do you think about plain English? Would it save you money at the bank? Tell us about it in the comments.
Further reading:
- WSJ on the Plain English Campaign (enjoy the headline)
- Plain English, Plain Sense