ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Monday, April 5, 2021

Trump's Campaign and Recurring Charges

The NYT reported that former President Donald Trump’s campaign used the bugaboos of this blog – fine print, wrap contracts, preset defaults, ALL-CAPS, all-bold, and overall inadequate notice – to charge their donors recurring amounts without their awareness.

As readers of this blog are well aware, I am not a big fan of wrap contracts. I am doubtful that most users intend to assent when they engage in acts that are construed by courts as “manifestations of assent.”  It’s simply too easy to click without thinking and too burdensome to find – much less read – all the hidden fine print.  Most of the time, the clicking is relatively innocuous until there is a dispute.  While clicking to a mandatory arbitration clause results in waiving an important right, it is a right that most people won’t assert unless there is a problem with the primary consideration. If there is no problem with the transaction, then the user never even notices that the user waived the right to arbitration.  It is only when there is a problem with the transaction and the user tries to sue, that the waiver becomes relevant to most users.

What is always relevant and important to users, however, is money.  Even those in favor of digital wrap contracting are inclined to demand more in terms of notice and manifestation of consent when what is being extracted is money.  Users care when companies deduct money from their accounts or charge their credit cards even if it takes them a while to notice that there is a recurring charge or deduction.  Courts, too, have been more demanding, often requiring specific assent and actual notice where recurring charges are involved. 

The Trump campaign went the opposite direction.  It used a for-profit company – WinRed – to process its online donations which seemed to have made every wrong move in the online contract formation playbook.  Not only did it not seek specific assent for recurring fees, it actually didn’t seek any active manifestation of assent at all for them.  According to the article, one donor who was living on less than $1,000 a month made what he thought was a $500 one-time donation.  Instead, he was charged $500 every week until his utilities bills bounced, his bank account was frozen, and a total of $3,000 was withdrawn from his account.  The reason?  He didn’t see the pre-checked box that stated in fine print that his donation was a recurring one.  Another donor made a $1,000 donation only to find that they were charged for $6,000.  (They were refunded the $5,000 after the election).

As Election Day neared, the Trump campaign doubled down on these boxes.  In June 2020, the pre-checked box was for a monthly recurring donation, but in September that pre-checked box was for a weekly recurring donation, and then additional pre-checked boxes for certain urgent sounding special events referred to as a “Cash Blitz” where the donor was charged an additional $100.  In October, the print in these rectangles which contained the pre-checked boxes were in bold and ALL CAPS (which as we know, is not an effective way to provide notice).  As Harry Brignull, a user-experience designer, told the NYT, “It is very easy for the eye to skip over [pre-checked boxes]….The only really meaningful information in that box is buried.”

Pre-checked boxes for recurring charges are an all-too-familiar sight on all kinds of donation websites although the way they are presented varies which affects their noticeability.  The Biden campaign’s online donation processing platform, ActBlue, also used them although it stated that it was phasing them out and claimed it only used them when “explicitly asking for recurring contributions,” (whatever that means). According to the NYT article, after the election, the Trump campaign refunded 10.7 percent of the money it raised on WinRed, and the Biden campaign refunded 2.2 percent of the money it raised on ActBlue. 

Some may wonder – if the money was eventually refunded, what’s the harm?  First, there were probably at least some donors who didn’t catch the recurring charge, which doesn’t mean it’s fair or right.  Some who did, probably didn’t want to go through the hassle of seeking a refund.  Finally, it allowed the Trump campaign to boast about a much greater percentage of funds raised than was warranted, which benefits the campaign’s momentum and marketing efforts.

I find pre-checked boxes, especially for recurring charges, objectionable and insufficient as notice regardless of the cause or the party.  I think everyone – Democrats, Republicans, and non-profits – should just stop using it.  It is a poor way to have users “manifest assent.” 

https://lawprofessors.typepad.com/contractsprof_blog/2021/04/trumps-campaign-and-recurring-charges.html

Commentary, In the News | Permalink

Comments

Egregious conduct that, unfortunately, all too many web sites get away with, but in the case of the Trump campaign, with a definite end in site, as one newspaper pointed out, it could have been an intentional strategy: even after refunding the money it got an interest free short term loan at a time when it desperately needed cash. This at the expense of pensioners, working people, and banks and credit card companies, who another newspaper reported found up to 3% of their requests for reversing charges in the month before the election were charges from WinRed.

Posted by: Marian Dent | Apr 6, 2021 2:05:59 AM