Inconsistent Regulations in Fintech: How Transparency Can Close the Gap

Financial technology has a dark side, and without consistent regulations, the threat to consumers’ personal data, rights, and protections is one careless click away. Monica Eaton, founder of Chargebacks911, maintains that transparency in fintech is a surefire way to mitigate deceptive practices that erode consumers’ fundamental protections.

How many people actually read the “terms and conditions” before agreeing to them to expedite the pleasantries and move on to the goal of that first click on a website link? According to a Deloitte survey of 2,000 U.S. consumers, 91% skip the terms and conditions page and blindly accept. For Gen Z and millennials between the ages of 18-34, 97% select “agree” without a care in the world.1 But what’s in a terms and conditions page, and how enforceable are those tedious and seemingly nonsensical paragraphs? Financial technology, or fintech, tools, and services, are so pervasive in the financial transactions people conduct every day that many don’t even realize they’re using them. Financial technologies, such as Venmo, CashApp, Paypal, and any of the prolific mobile and online banking apps, are available with a quick download, instantly ready for use. What kinds of federal regulations are fintech companies beholden to? Monica Eaton, founder and CEO of Chargebacks911, champions transparency as even more important than federal regulations.

During its formative years, fintech has enjoyed looser regulations than those applied to the banking institution for decades, but that is about to change. The Consumer Financial Protection Bureau (CFPB) is more closely scrutinizing the fintech industry and is currently conducting examinations of nonbank financial companies and cryptocurrency firms to hold them to the same regulatory standards as traditional banks.2 Regulative jurisdiction over fintech is split between the federal government and individual states, which naturally creates conflict and confusion.3

While the logistical aspects of fintech regulations are being sorted out, Eaton promotes the obvious and immediate benefits of transparency. Eaton cautions, “The familiar adage of ‘what you don’t know, can’t hurt you’ does not apply when it comes to blindly agreeing to a legally binding contract. ‘Signing your life away’ is more accurate. The buying and selling of personal information are becoming an industry standard.”

The CFPB is taking steps to address the issue of nonbank financial firms inserting terms and conditions that effectively strip consumers of their constitutional rights. In January of 2023, the CFPB proposed a ruling to create a public registry of the fine print included in adhesion contracts, known as “take it or leave it” agreements that can infringe upon consumers’ legal rights and protections.4 The proposal seeks to hold nonbanks accountable and equip consumers with the facts necessary to make informed decisions when contracting with nonbank entities. Adhesion contracts are not legally enforceable if the court decides that the contract grants disproportionate power to one party over the other or is otherwise unreasonable, ambiguous, or includes conditions so unconscionable that no reasonable person would expect them to be in a contract.5

Eaton asserts, “A lot more needs to be done. The legalese language contained in these agreements is not easy to understand for people outside the legal profession, which puts consumers at a distinct disadvantage. However, without increasing consumer accountability in balance, revised terms and conditions policies are not likely to move the needle. The lack of restrictive standards in eCommerce practices aligns with our free market ideals. Regulators should place more attention on efforts that help codify new ways to protect consumers that help address concerns at the root cause. For example, utilizing payment codes that display to the consumer and relate to the type of sale or related return policy; would not only serve to inform the consumer of certain terms they likely never read but also regulate retailers without harming the competitive landscape. Technology has advanced considerably and should be leveraged to improve behaviors on both sides of the coin.”

Many businesses have strict return policies, sometimes not offering the option at all. Consumers are often caught off guard when attempting to return an item or cancel a service to find that they have minimal or no options. Banks offer services to their customers that allow them to contest a charge they deem illegitimate or unfair, known as chargebacks. Banks have become more accommodating to their customers in issuing chargebacks by transferring funds from the merchant to the customer’s bank account, frequently without investigating the source of the dispute.

However, the ease of the chargeback process has led to more instances of first-party misuse, where customers decide not to risk being turned down for a refund with the retailer and instead go directly to their bank. Others deliberately take advantage of the system to get items and services without paying for them, commonly referred to as friendly fraud. For eCommerce businesses, this results in the loss of billions of dollars, recently estimated to be over $48 billion annually, by one card brand alone.6

Having experienced rampant chargeback fraud in one of her own business ventures, Eaton became an expert in chargeback remediation by developing innovative and agile technology to give merchants workflow management tools that help reduce the otherwise manual effort required to contest chargeback fraud and misuse.

Eaton offers more insight into how e-retailers can reduce the tendency of consumers to go directly to their own bank, deliberately bypassing the merchant’s customer service options.

Eaton says, “Transparency is becoming an essential business practice to earn and retain customers. Let your customers know that you are there for them every step of the way and want them to have an exceptional buying experience. Be upfront with all return policies, and make sure they are easy to find and easy to understand.”

When customers trust that they are doing business with a reliable, honest, and reputable seller, they will be more inclined to reach out directly to that business to resolve any issues they may have with their purchase.

Eaton concludes, “While fintech is a virtual industry, it can still be a personal experience. If there are no walls preventing open communication between a business and their customers, it encourages mutual trust and continued loyalty.”

Monica Eaton 1

2017 Global Mobile Consumer Survey: US edition The dawn of the next era in mobile . Deloitte. (2017). Retrieved from
Manfredi, R. (2022, May 6). CFPB invokes dormant Dodd-Frank Authority to regulate nonbank financial companies. Gibson Dunn. Retrieved April 21, 2023, from
Global Legal Group. (n.d.). Fintech laws and regulations: USA: GLI. GLI - Global Legal Insights - International legal business solutions. Retrieved April 21, 2023, from
CFPB proposed new rule to establish public registry of “take it or leave it” contract terms and conditions. JD Supra. (n.d.). Retrieved April 21, 2023, from
Legal Information Institute. (n.d.). Adhesion contract. Legal Information Institute. Retrieved April 21, 2023, from,had%20the%20chance%20to%20bargain
Friendly fraud cost: What do you lose to chargeback abuse? Chargebacks911. (2022, June 27). Retrieved April 21, 2023, from


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