Terms and conditions are a necessary evil in today's complex world. As lovely it would be to have insurance policies without exclusions, and bank accounts without charges - we're too far along the road to turn back.
But if we're to accept that financial products are necessarily complicated, then it's all the more important that banks and insurers work as hard as they can to help their customers understand them. Sadly, quite the opposite tends to happen in financial services. Banks and insurers manage to turn complex products into ones that not even everyone in their own company understands - let alone their own customers.
Have you got an A-level in small print?
New research by Fairer Finance reveals that the average insurance policy document is written in a language that is only accessible to 18 year olds finishing sixth form college. Worse still, dozens of banking and insurance documents would only make any sense to people who have a post-graduate degree.
We looked at 285 banking and insurance documents, and ran them through a number of readability tests. These are fairly broad brush measures - looking at things such as how long sentences are, and what the average number of syllables is per word. But they are a good rule of thumb for understanding whether a document makes any sense to the average consumer.
The National Literacy Trust says that 16% of UK adults have the reading age of an 11 year old. But we couldn't find a single insurance policy document that had a reading age of 11 or less. Banking documents weren't much better. The average reading age was 16 - that's GCSE age - and many were much worse.
This isn't just bad news for consumers - who can't make head nor tail of the literature that they're given. It's bad business as well. If people buy insurance policies without really understanding what is and isn't covered - it inevitably leads to disappointment when they make a claim and find they're not covered. Insurers and their customers would all be much better off if everyone was clear about what was included, and what wasn't. Sadly, we're miles away from that.
Who's going to move the elephant in the room?
We're publishing these figures to try and pressure policymakers into action. The problem with complex terms and conditions is not a new one. Everyone from the PM to the head of the Financial Conduct Authority would privately admit that consumers are now forced to sign up to all sorts of things that make no sense to them. But it's one of those problems that most seem to see as too big to tackle.
To give some credit where it's due, the FCA did put out a discussion paper in the summer, encouraging companies to work harder to communicate clearly with their customers. But this strand of work doesn't feel as though it's going to end in any kind of action.
If they really wanted to, the FCA already has all the tools it needs to make life difficult for companies who write their documents in impenetrable legalese. The rules say that documents should be "clear, fair and not misleading". We don't think a single company passes that test at the moment - and we'd like to see the FCA making an example of the worst offenders, even fining them.
But this is not just a problem for banks and insurers - it's much wider than that. Everytime you sign up for any service online, you're forced to click a button agreeing to pages and pages of small print.
A leaf out of Florida's book
Maybe it's time for a more radical approach to tackling small print - such as the approach that is catching on in the US? In Florida, they now have a state law stipulating that insurance documents must achieve a minimum readability score. It's not too onerous - but many of the insurance and banking documents that we've highlighted in our latest research would be deemed unenforceable on the basis of Florida's legislation.
Here's our list of the worst that we found:
Admiral travel insurance - Reading grade: 19
AA car insurance - Reading grade: 19
Octagon car insurance - Reading grade: 19
Admiral home insurance - Reading grade: 18
Co-operative car insurance - Reading grade: 18
In case you're wondering what a reading grade is, it equates to the US school year. In the US, year 12 is the last year of high school. So once you get to reading grades of 15 and above, you're into post-graduate study level. Yes, that's right, you'll need a PhD to understand Admiral's travel insurance policy.
Our latest research just focuses on reading ages. Last year, we looked at length - and found that some Ts & Cs were twice the length of novels like Animal Farm and Of Mice and Men.
What more evidence is required to convince policymakers that this is a problem that needs to be got to grips with?