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>When I bought my house, the attorneys sat down with me and had me read through and explained to me every single term of the purchase agreement and my mortgage, checking that I understood them. Absolutely no one has done this for Facebook, throwing a few hundred into Robinhood, etc. It's not worth it, and the terms change with such frequency that it would be outdated immediately.

I still have my binder from my closing. Worked in the mortgage industry for a while in college. If they truly had you read through every page with explanations it would have taken you multiple days to do your closing. I think you're misremembering.

What they likely did was went through page by page, giving you a summary of each page as they went, and gave you the option to read it in its entirety or just sign based on their summary. You might have read through the first 4 pages before you realized you would be there for the aforementioned multiple days if you wanted to read through every line of every page.

Really? I _know_ I read everything, both for my loan and for the purchase, when I bought my apartment. It wasn't really that much. It took a few hours. I didn't read every law that the contract referred to, but I read the contract itself.

Is a house really that much worse when it comes to paperwork? Or is the US just that much worse with this stuff?

I still have my closing documents from our house and it's about an inch and a half of paperwork.

X Hours = xh$ with probability you misunderstood something
Compared to paying lawyer to explain it to you in let's say 1/10 of the time and better understanding

X/10h$ + lawyer fees

Compared to not reading and just trusting

No upfront cost, but probability of bad outcomes increases.

I think when buying a house that makes sense.

Buying 100$ worth stock? Not sure. 10k worth? Hmmm maybe

When i closed on my house I insisted the package be sent to me days ahead so I could read it over. Made everyone unhappy that was necessary including me. But I was in a position to do that and I did. I think most good notaries go over a verbal summary of the documents at the time of signing - but it's obviously not binding if there is a misunderstanding.

Margin accounts someone could read over after the fact - but the length and lack of a critical summary on most agreements is ridiculous.

TOS on websites aren't the same the agreement to a margin account. Not reading that would be like not reading your mortgage agreement or your auto loan agreement. I agree they're long and confusing but financial agreements are super important to read and if you can't understand it hire a younger/cheaper lawyer for an hour. Every contract I've signed for employment I've hired someone to confirm the law in that state and it really makes a difference knowing what is in there.

> Every contract I've signed for employment I've hired someone to confirm the law in that state and it really makes a difference knowing what is in there.

That's really cool to be able to do. For the average American, that's pretty much impossible to afford.

It’s not impossible to afford. You can a lawyer to review a employment contract for a few hundred dollars. Many, many Americans can afford that.

Apparently only 39% of Americans can afford a $1,000 emergency expense. I'm sure that hiring a lawyer to read over an employment contract does not even fall under "emergency expense" for the vast majority of people, thus making the number of people who can afford it even lower.

https://edition.cnn.com/2021/01/11/success/1000-emergency-ex...

This isn't just TOS though. It's a pretty short and easy agreement that you're accepting.

https://cdn.robinhood.com/assets/robinhood/legal/RHF%20and%2...

You'll find a similar concise and clear statement from every broker when you enable margin trading.

I would read each and every word of a four page document, especially if it's finance related. Unfortunately, some people won't read anything longer than a tweet.

This is about having a very basic understanding of buying stocks on margin entails. It isn't your money, they do what they need to in order to protect themselves. You don't need to read their TOS because this isn't specific to Robinhood. It applies with every broker.

> I'm going to say practically no one reads these agreements, and even fewer understand them.

This might be true for the myriad of free online services and applications most people use on the daily.

But with anything I plan to spend or invest my money in/give my real personal information to I will most certainly take care to properly read and understand what I'm agreeing to there.

In that context, comparing your mortgage agreement with signing up for Facebook is apples to oranges. One of those is a very real very long-term financial liability directly and undeniably tied to your real identity with a legally binding contract, the other is a service that tries to monetize whatever data you give to them based on EULA and ToS that in many jurisdictions are not even legally enforceable.

> I will most certainly take care to properly read and understand

And when you don't understand the dense legalese how did you get clarification? Did you pay a few hundred dollars to have a lawyer review the contract and explain it to you? Perhaps call the company up to have a minimum wage call center employee explain it to you? Or just come up with an interpretation of the text that seems to make sense and conclude that must be what they mean?

After awhile even doing that grows tiresome for all but the most important services. So, we really do need something better.

> And when you don't understand the dense legalese how did you get clarification?

By asking people knowledgeable in the field I trust, if it's big and relevant enough I might even invest in a lawyer, but at the very least I will put effort into trying to understand it.

If that doesn't work then I will be way more skeptical of whatever I'm supposed to agree to because anything written to be purposefully vague, and difficult to understand, does not entail a lot of trust nor confidence in me.

But not understanding, and making no efforts on your end to understand, is a very poor defense for entering anything legally binding: Making sure you understand is ultimately up to you and only you because at the end of the day it will be your ass and your assets on the line.

Which is a mindset even shared by WSB: That submission is full of regulars reiterating how people have been told not to buy GME on margin exactly because of what ended up happening.

> when you don’t understand the dense legalese

This confuses me a bit because I have personally never encountered anything in a legal document that I didn’t understand. I am not in support of reading all of the TOS, as that seems like an impossible feat, but when I have read any TOS or contract, it seemed understandable.

The hardest thing for me is comma separated if statements written in plain English. But that’s mainly because it can be difficult to hold the conditionals in short term memory - but it has always been manageable.

What’s an example of dense or unintelligible legalese?

I opened a new bank account earlier this week, I've got 8 documents to review. Here's a section at random on how interest is calculated.

> We calculate interest each month based on the lowest Daily Closing Balance. We pay interest on the last Business Day of April and October. To earn any interest, the account must stay open for one full calendar month before the payment date.

Not dense language at all. But, note how Daily Closing Balance is title case, so that means its been defined elsewhere, so I need to flip back and refer to the definition then flip back to page 8. The definition which by the way isn't how you'd likely define a closing balance. Next part of interest is April, and October. So, interest is only paid twice a year⁉ That makes no sense, so I scan around and see this is for the Savings X account. But, I don't think that's what the name of my account is called, so now I have to flip through all 8 docs to find what specifically my account is named. Except none of the docs actually tell me which product I signed up for, instead I figure this out by comparing the fees outlined in the account types with what I wrote down when choosing the plan with the agent that I spoke with earlier.

Now back to the paragraph above and realize I'm realizing I've been analyzing the interest schedule for an account that isn't relevant to me. Scanning for my account I find that the interest is calculated as one would expect--some special conditions around the daily closing balance.

I'm frustrated and growing tired, but that is only 1 paragraph in 1 of 8 documents. The bank clearly made no effort to include only the sections that apply to me. So there is a great chance that I'm either going to miss a nuance in a section (like how they've defined daily closing balance to have some exclusions), or ignore a section believing that it doesn't apply to me.

Keep in mind you and I are likely both college educated, have training in logic and can figure this out if we spend the time/energy. Do you think the average American has a chance to understand what they've signed?

This is not about reading a TOS, this is about borrowing money from a brokerage and then losing them on the stock market

That makes sense, but presumably the financial industry pretty regularly needs to enforce specific terms in financial contracts. So here we're seeing -- from one day to another -- people complaining that Robinhood and other financial intermediaries won't let unsophisticated traders easily access particular kinds of financial trades and products, and also that complicated terms may apply to those same trades and products. Couldn't these two issues be related?

(I don't mean to accuse people of hypocrisy by mentioning this! I just mean that I genuinely think financial intermediaries are in a tough spot as they're pressured to allow everyone to trade things where quite a lot of customers don't quite know what they are or what they signify.)

You are saying that you willfully entered into a loan agreement without reading the terms of the contract. I just don't see that as a defensible position. I don't know how Robinhood does it, but TD Ameritrade was very clear with me what the terms of my margin account were. It's one thing to ignore TOS on an application, it a whole other world to sign a loan agreement without reading the fine print.

Here's the thing though, it's always been this way with margin agreements. Even before tech cos with impenetrable ToS agreements.

I'm beginning to wonder if the people who rushed into this "war" really ever knew what they were getting themselves into? Especially the ones who bought on margin. It's such a risk, and obvious loss in this situation, that I can't imagine any non-suicidal financial actor doing it?

There is a big difference between a website TOS which is mostly legal ass covering and a loan agreement with is what margin is.

If you take a loan and didn't check the interest rates, term, and basic conditions, that's on you.

>I don't think having such impossible terms that you "agree" to are in good faith.

These are standard terms and you are borrowing money from them so logically they will have a lot of say in terms of that money. Credit cards will have interest rates, collateral loans will have liens on property, etc, etc. Nothing about this is impossible.

I do find it funny how the people who complain about this are also complaining about government oversight, robinhood stopping trades, etc. If you want full freedom then it's on you to pay attention to the details and not expect someone else to bail you out of your own ignorance.

Your position of “TOS are too long and complicated therefore I should be held to them” is completely ridiculous.

There is eventually a point where if you want to make independent financial decisions as adult, you need to be responsible for understanding what you’re getting into.

Do t read the TOS for your Facebook account? Low risk. Don’t read the agreement for your RH margin account? That’s just dumb.

Yes. Is that one way of describing the "find a bigger fool" strategy of investing?

Is that the purpose of these apps? To get uninformed liquidity into the market to benefit investment banks?

As a general rule, we should always keep in mind that startups are founded to make money for the startup's founders. If other stakeholders such as customers, employees, investors, and so on are able to make money off of it, that's a plus. But we shouldn't expect founders to do anything other than act in a manner facilitating the generation of wealth for themselves.

RH is no different than any other startup in this regard. They aren't going to open themselves up to the risk of not following a margin agreement in the name of "the revolution!" They are in the business of making money, even if that means users lose their shirts.

And if people have been trading GME, AMC, et al on margin? (I mean, unless the government steps in or something?) I'm afraid a lot of them are going to be losing their shirts in the coming weeks.

It's not worth it

Well, there you go. You determined it wasn't worth it, so don't be surprised if there's an outcome you don't like.

I read terms quite often and have flatly refused to use services because of them, or in some cases told them in writing I don't accept a problematic clause (for whatever that's worth). It's a real pain and I typically have very little bargaining power.

Maybe if the world wasn't full of people who simply don't care we could effect some change here.

Thank you for being honest about it. As far as I understand, not reading the terms of a contract you agree to is not a defense, assuming the TOS are presented clearly and you acknowledge your acceptance with some unambiguous action. You don't have to read the terms, but you are bound by them anyway if you agree to them.

> When I bought my house, the attorneys sat down with me and had me read through and explained to me every single term of the purchase agreement and my mortgage

Really? Because that would make closing take forever. I mean, even after the purchase agreement and mortgage terms, there are a ton more documents to go through.

They attorneys have done the same with me through all three of my closings, and yes, they do take forever, precisely for that reason.

They take forever, but if I had to have been explained each line for each form, it would have taken a week.

Instead, our attorney got a copy of all forms the day before closing for him to review. Then he could review them quickly, looking for anything unusual. Then, during closing, we didn't have any questions, so this made an already long process a bit more efficient (still took over an hour).

I'm guessing it was the mobile notary he might have thought was an attorney.

No, this was my title attorney. Want his card?

> practically no one reads these agreements, and even fewer understand them

Argumentum ad populum. Not very convincing.

There is a reason the finance industry is so heavily regulated, and, at least in terms of intent, it is not to allow the elites to hoard all of the capital (although that may be a side effect).