Facebook Illustrates Peril of Web Commerce

Published Apr 30th, 2010

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-Like all treacherous situations through the ages, the hazards of engaging in today’s marketplace–especially online–reveal themselves very gradually. The imperceptible nature of these creeping menaces combined with the pathology of humans to just “go with the flow” creates these conditions where our society finds itself repeatedly locked in various states of dysfunction. For instance, it has been proven over and over again that if Americans would just replace processed foods with garden vegetables, organic meats and fish, current levels of childhood obesity and type 2 diabetes would immediately plummet. But Americans won’t do it because they’re “caught in the flow.” They don’t think they’re doing anything wrong, but before they know it, they’re fat, their kids are fat and everyone has type 2 diabetes. How did that happen? Who saw that coming?

So it is on the internet. Consumers are so locked into a shocking state of dysfunction–obsessed with “convenience” and immediate gratification that they’re “caught in the flow” and do not even question the terrible practices which online companies dictate to them through adhesion contracts, manipulative text and the rigid structure of their websites. Thousands of Americans are burned every week by online companies who deceive them in a myriad of imaginative ways–perhaps it was by withholding information, or perhaps the company was intentionally unclear about the terms of the transaction. Maybe that day, the website had “malfunctioning” check boxes. Maybe the consumer tried to clarify how the transaction would work, but only found obscure instructions or no FAQ that exactly matched their concern. Whatever the tactic, the company always wins online, and the consumer always loses.

I am extremely scrutinizing about everything I do online. I rarely purchase anything on the internet. I no longer pay any bill online and sadly, I’ve even given up eBay because of the questionable practices of its subsidiary PayPal (i.e. holding funds far longer than necessary, payment reversals: “When you receive a payment through the Service you are not protected against a subsequent reversal of the transaction, except as set forth in the Seller Protection Policy set out in the User Agreement,” and a USER AGREEMENT that is currently ten separate documents of tiny-print, legalese on multiple pages). I will use Orbitz, but with trepidation, as I have seen people incorrectly billed for travel insurance in which they specifically checked that they did NOT want it. The online marketplace is saturated with land mines ready to blast a hole in your budget, your credit rating and your expectations.

Using skillful cautiousness, developed from countless disputes with online and Earth-bound corporations, I endeavored to redeem a coupon for a Facebook Ad, given to me by my web host. Sadly, as much as I like Facebook, I was very disappointed to see a successful, multi-billion dollar company resort to the same deceptive practices as any fly-by-night internet operation.

When anyone gets a coupon from the newspaper, the terms are pretty clear and are limited to what can fit on one or both sides of a little piece of paper. Not so with Facebook. I happen to already have a page I wanted to advertise, entitled “ETrade Class Action Lawsuit.” I had never intended to advertise the page, but with the coupon being presented to me I figured I’d at least put it to use. Now, when you go to the grocery store with a coupon–for lets say a free two-liter bottle of soda–the clerk does not make you leave your credit card information do they? You give them the coupon and you leave with your bottle of soda. The end. Facebook, on the other hand utilizes the first of many one-sided transaction tricks: Forcing you to invest your time and energy. It may not seem like a big deal, but many people will complete an unfavorable transaction simply because they put a lot of preliminary effort into it, before they reached the “gotcha” page. For Facebook Ads, this entails entering all of your information about the page you’re advertising, tags, the countries and languages you want the ad to appear in, which of your friends you want to market through, etc. It can take anywhere from ten minutes to a half hour depending on how detailed you want to get. When everything is all ship-shape, you click “continue” and guess what comes up–the credit card information page. Since I had a coupon, I immediately scanned for a place to plug in my coupon code. I finally found it at the bottom, in a link that asks if you have a coupon. When you click on the link, a coupon code input box appears. I entered my coupon code and expected that I would get a confirmation page telling me my ad is up and running. That’s not what happened. The subsequent instructions insisted that I enter all of my credit card information anyway. If you don’t enter your credit card information, the coupon is essentially useless. This is one thing that really angers me about internet commerce. They want to promote, promote, promote on every page. We endure annoying pop-ups, incessant banner ads and deceptive lures every day, but nearly every promotion is phony, impossible or unrealistic–a dozen hotel stays between now and next Friday gets me 10,000 frequent flyer points? Really? I’ll jump right on that.

Why not enter my credit card information? Why not just “go with the flow?” I want the ad right? What could it hurt? Well, how you are charged for your Facebook Ad is based on the number of clicks your ad receives. Facebook determines the price-per-click. Mine was set at sixty-five cents. I picked twenty-five countries that my ad could show in. How on Earth am I supposed to know how many people will click on my ad? Facebook doesn’t even know. Clearly, if I was going to enter my credit card information, this adhesion contract had to have limits. One limit is a feature that took a lot of digging to find. You can set your daily budget. Yet, I didn’t even know how much the coupon was good for. I did some more digging and found a page that showed an amount-tendered-thus-far kind of thing, which totaled–$25. I went back to the other page and set my “daily budget” for $25. It was all set, but they still weren’t going to get an open-ended credit card of mine for back up. I went out and got a pre-paid debit card with $5.00 on it. Still, I’ve seen enough Judge Judy to know that a lot still lies on the back of the consumer to make sure their questions are answered prior to the transaction. My question was “How do I know WHEN my coupon will end and my credit card will be charged?” I went to their Help Center, which does not allow you to send in a question that you write yourself. You can only write a question if it is directly related to a topic they have pre-written. After spending MORE time and going through several links and several windows, I found this:

How will I be charged when using a coupon code?

If you activate a coupon code, we will deduct from your advertising credits balance until they are fully redeemed. If you choose to continue running your Facebook Ad after your advertising credits have been fully redeemed, we will charge the primary card associated with your Facebook advertising account for all additional advertising that is run. Whether you are using advertising credits or a credit card, the total billable value of clicks or impressions in a Facebook billable day will never exceed your daily budget. http://www.facebook.com/help/?faq=14678

Well, tucked away very neatly in that paragraph is the intentional omission of exactly WHEN “your advertising credits have been fully redeemed.” Then, in another semantic deception they say “If you choose to continue running your Facebook Ad after your advertising credits have been fully redeemed…” Folks, you don’t CHOOSE to continue running your ad. It runs anyway for that full day, WAY PAST WHATEVER YOUR COUPON CREDIT WAS. There is no CHOICE. But hold on, weren’t you able to set your “daily budget?” Oh yes…The “daily budget.” What exactly does “daily” mean? Conveniently for Facebook and bad for you, they never define “daily.” So my ad ran from from 9:44pm (PST) on April 22nd to 9:26am (PST) on April 23rd–less than 24 hours. My daily budget as you may recall was $25.00. My total bill: $39.71.

Where in any of this could I have ever used my coupon for just the amount of the coupon?

How did I get charged an additional $14.71 when I had worked so hard to limit my ad charges to the coupon amount? Several reasons:

Facebook wrote the adhesion agreement
Facebook designed the website instructions to be excessive in length, vague, incomplete and misleading
Facebook rigidly limited questioning to their pre-set roster of questions of which they even anticipated that people would have specific questions about coupon use. This allowed them to answer incompletely and prevented me from even submitting a more specific question. (I submitted one anyway but never got an answer). SEE FORM HERE
Facebook structured the advertising feature so that instead of allowing coupons (that THEY distribute) to simply expire, they set it up to run off onto my credit card, without limit. Wouldn’t it have been more honorable if they did not ask for a credit card up front at all, but instead allowed me to enter the coupon code, use the coupon and then affirmatively log-in to enter my credit card information “If [I chose] to continue running [my] Facebook Ad after [my] advertising credits [had] been fully redeemed?” The fact that they create such subterfuge around the entire Facebook Ad transaction demonstrates that they know exactly what they’re doing and that every coupon redeemed will net them a little bit of money from a lot of people, through trickery, confusion and outright deception.

So what about that extra $14.71? Well, this guilt trip now shows up on my billing page:

Also, I am actively being invoiced for that amount. Unfortunately for them, I had a little trick up MY sleeve. My credit card information is for a pre-paid debit card with $5.00 on it. They will never see a dime of that $14.71. Of course they always have the great American henchmen on their side–The credit bureaus. So I suppose, after being deceived by yet another online transaction, I’ll also have to suffer a blemish on my credit report–the ultimate blackmail–available as a tool of oppression for large, wealthy corporations.

Had I been a contributing party to this adhesion contract, I would have written in my own legalese:

I reserve the right to not let you exploit me through deceptive charging techniques of which I have no knowledge of the accruing charges, no ability to limit the charges and no way to refuse the charges or ask questions about the charges or contact somebody so we can discuss the charges, by making it impossible for you to collect your charges.

One explanation I found online for why someone was charged in excess of their “daily budget” (even though it says all over Facebook’s FAQs that charges “will never exceed your daily budget”) was in Facebook’s definition of the word “daily.” Clearly, “daily” does not mean “24 hours” in my case. Apparently it must mean “calendrical day.” Yet, they don’t define the word “daily” in ANY of their terms and conditions, so again, the customer would never know that until it was too late. “Calendrical” is problematic for them though, because the internet is global. Somewhere in the world, my ad began at 12:44am and ended 18 minutes shy of the next calendrical day. Right?

I tell this story because this Facebook situation is really every internet company’s story. They bury you in “terms and conditions” that teams of high-paid lawyers drafted and we ordinary people are all supposed to understand them too. They structure the transaction pages to hide what they want, to minimize what they don’t want you to see, to omit information essential to protecting yourself from future problems, to maximize their revenues, to guarantee payment or maybe even ongoing payments that you’re not aware of yet, to make you do all of the work, while blockading you from accessing any real customer service person and to lure you into paying for products or services that have been misrepresented all along.

What is the answer? You could live 250 years and never get through all of the terms and conditions presented to you in a year. The answer is to refuse to do business under adhesion contracts, to only use pre-paid debit cards online and to buy local, in person whenever you can. Stop your obsession with having everything “convenient” and “immediately.” Never give these companies the upper hand with a credit card that has no safeguards to limit what can be charged. Courts vary on whether or not they will uphold the Byzantine terms and conditions of a company, so the user is always in peril, especially since the terms and conditions presented to you one day can change the next on any given website. Companies rely on the absurd nature of terms and conditions. They indemnify themselves from lawsuits by pre-excusing all of their potential, future fraud. In fact, the entire online marketplace is a cesspit of snares, traps, tricks and lures.

Simplicity is the best remedy, so I do just fine shopping locally, in person and getting my goods and services with cash, in real time. The more people live this way, refusing to let distant, amorphous online companies control their credit and bank accounts, the less exploitative and opportunistic these internet companies will be.

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