Regarding criminal fraud: That might be tough to prove. See, for example, this part of Virginia's fraud law:

http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+18.2-178

Note that merely obtaining a signature under false pretenses is a crime. Of course, the definition of "false pretenses" is the sticking point. Technically, the customer did not make any false representations. It seems he merely expected the bank not to notice his "proposed" contractual changes. That would not seem to satisfy the elements of the crime, though I wouldn't bet my own freedom on that.

Regarding bad faith: It would be interesting to see if the court would find a breach of the implied covenant of good faith and fair dealing. It's iffy. Generally, such a breach would arise from either party's conduct outside the signing of the contract itself. I.e. you do something underhanded to thwart the other party's enjoyment of his contractual rights, without breaching any specific term in the contract.

Could a breach of the implied covenant arise from the negotiation process itself? In my cursory search, I didn't come across any cases like that, but they could exist. In this case, there does seem to be some willful deception on the customer's part. One could argue, based on the circumstances, that he expected the bank not to notice his alterations. Perhaps this would be considered bad faith.

One could also argue that the contract is void as there was no meeting of the minds. This can be a difficult case to make when there is a written contract. Nonetheless, in unusual circumstances, which this appears to be, a written contract can be voided for this reason. Here, one could argue that the two parties thought they were signing contracts containing radically different text, and thus there was no meeting of the minds.

Note that you can't just claim this any time you want to get out of a written contract. The default assumption is that your signature indicates you read and understood the contract. You have to show some unusual circumstance--such as one party's surreptitious alteration prior to signing--if you want to claim there was no meeting of the minds. And even then, a win is far from guaranteed.

In other words, it's not just carelessness on the bank's part. That alone would not be a sufficient argument. Rather, it's carelessness coupled with the customer's willful exploitation of that carelessness. That may be enough to tip the scales in the bank's favor.

The problem is that fraud charge may be hard to prove, but may be much easier to initiate. And criminal investigation, even not resulting yet in a charge, may be rather annoying matter. For example, they could get (given a friendly judge) an order to seize all your computer equipment to look for signs of fraudulent activity. And keep "looking" for years, while you can't use them. And so on. If they arrange a cooperation of a friendly prosecutor, they can cost you lots of money while never getting to the court. Since they are paid by the taxpayers and you're not, you lose.

I would wager he probably has 1 crappy old computer a printer and a smartphone (just my guess as an eastern European).

He could care less if all that crap gets locked off.

As far as I can tell even that fact that he kept his end of the contract to the best of his abilities for 2 years can be used as proof that he isn't fraudster.

A fraudster would have done that a lot sooner.

Customers are always cautioned to read the fine print. I would not know why this would not be valid advice for banks (or any other business) as well.

"Alexeev then sent his updated agreement to the bank, and shortly thereafter received the bank's signed and certified copy, as well as a credit card."

It's been a while since I signed up for a new credit card, but I don't recall getting back anything "signed and certified." Terms and what-not, sure, but that sounds like the bank sent back his (updated) contract.

Apparently, I've gotten more houses than credit cards, because that's exactly how you handle contract negotiations there.

I don't think a bank will want to go down the line of arguing the contract shouldn't be binding because they shouldn't have to read the small print - that sounds like an overall loss for the bank in general.

That's like I would initiate a contract with you and after we read it together and you agree it's what you want to sign I covertly slip a page into the pack that completely changes the terms and trick you into signing it without you actually knowing it's there. You can reasonably claim you intended to sign the original one, not the one I secretly modified - and I expect the court be more sympathetic to you than to my claims "you should have watched my hands all the time!" Of course, it'd require you proving that I did this, but if you can, your case sounds pretty strong to me.

Doesn't this case show that they cannot reasonably expect the contract to be identical to what they sent, in respect to all future contracts?

1 - The bank signed a copy then gave one to the customer to sign. If the customer changed the print at this point, it would no longer be valid.

2 - What this guy did, the bank gave him a copy, he modified it, then signed it, then sent it back, to which the bank approved. Which is still technically valid.

Your contact probably has aterm about them being allowed to change the contact and probably not even notifying you.

Will it work? It's hard to say. Courts are generally skeptical of the excuse that "I didn't read the contract."

Perhaps it comes down to this: Does a party who makes proposed edits have any obligation to point out such edits? Or does the responsibility lie wholly with each party to read the contract in its final form?

Good lucky going to court sayingthat you only read the credit card brochure so you thought you didn't have to read the contact before signing... Whichis exactly what the bank did.

If the bank get out of this one, and Russian contract law is the same, it will be going over all the precedence to this date.

My bet is that neither side will have it all. Contact will be upheld, but values will be ruled out of some legal common sense.

I don't want to quote at length, and there's no particular passage that nails this case, but my overall sense from the article is that the contract could be voided for want of mutual assent. Or that perhaps even the contract could be judicially modified back to the bank's version.

Anyway, here's the most concise (heavily edited) quotation I could find from the article:

"There are many ways, short of fraud, by which one party can take advantage of another in driving a bargain. For example...his disinclination to read a printed form...At the least, if a person consciously takes advantage of such weaknesses, he acts in bad faith."

But, as of 1968, he said: "Case law under this section is scant." Has this changed? Quite probably. Do I have a Lexus or Westlaw account to find out? No.

But in the end of the day, it's irrelevant, banks will use stronger language next time.

> banks will use stronger language next time

Except that such language could be deleted by the customer. In this case, a customer has demonstrated an ability to make arbitrary changes to the contract. Assuming he is legally savvy, he should be able to alter any terms that would damage his case. This, of course, assumes that the contract is held to be enforceable. I still have strong doubts about that.

But in organizations where such things are routinely signed by a clerical worker and returned (things like alarm service come to mind) you can make these changes and sometimes get away with them. At least in one case where I asked the clerk at Safeway to sign off on an altered terms and conditions on their loyalty card the manager came over and said that nobody in the store was authorized to sign on Safeway's behalf.

Clearly that did not work for the Russian bank which has already had the agreement litigated.

We take credit card/bank card forms for granted in that nothing is returned to you except another copy of the same (hopefully) agreement, the card and monthly statement. Not the copy of the document you signed with their corresponding signature.

I wonder if this case will prompt some changes in the way they conduct their card affairs.

Really? I'm surprised by that. In recent years I've only signed new bank paperwork as a company director, but in all cases where that happened in real time in a branch, I've asked that they make a photocopy of exactly what I signed for me to keep for my company's records. They have always done so immediately, without objection, and without the signed version leaving my sight.

This could be a whole new era of spam prevention, by being personally as full of it as every EULA. Just send out contracts, "by contacting me in any way you agree to the following...". Companies would be terrified to send anything at all to anyone.

What? Why?

They didn't go for it :-)

Back when my kids were young and we had a neighborhood baby sitting co-op, all the Mom's met once a week. We set up a program where we got 15 different cards, every week we put all the cards in a basket at the beginning of the get together, then everyone took a card when they left (the basket was shaken up to randomize cards). That gave everyone a card to use but only aggregate statistics on the whole group rather than individual statistics.

The name was always Jane Smith.

These days Safeway has "fixed" that practice by tying gas rewards to a particular card number. That forces people to use the same card if they want to get gas rewards. I don't know but I suspect it was in response to activities like ours which mitigated their efforts to collect data.

In fact, you can often keep the activated card (at all kinds of stores) even if they do ask you to fill in some papers. Just ask to take the forms home to fill them in and return later and take the card, too.

Now without the baby sitting co-op to randomize data I've offered my card to people ahead of me in line who don't have one, but again the gas rewards are changing that equation as well.

I've long since avoided Safeway (going on two decades), but back when I both visited the store and had a card, but under a different name (usually some variant of "Fred Flintstone" or "Mickey Mouse"), I found that my actual name eventually ended up on the receipt if I every paid by check.

Lesson: don't pay by check.

Lesson: don't patronize stores with shopper surveillance cards.

Most recent notable experience: a few visits to Border's Books, in which the store's "loyalty card" was pushed ever more vigorously. I responded "no, the NSA's already listening to my phone calls and reading my emails, no need for them to get my reading list as well" (this was years before Snowden, though after the AT&T listening room was revealed). The cashier was impressed by my integrity, and commented as much, as I paid cash for my purchase.

The last time I was asked if I had their card was during the final week of the store's liquidation sale. And I was thinking 1) why even bother and 2) where will that data go after the company shuts down (it turns out it was bought by Barnes & Nobel, which may itself go the way of Borders before too long).

So. Yeah. I'll pass.

As a non-USian who does not know this system, can somebody please explain what "gas rewards" are and why they would prevent the kind of card shuffling explained by ChuckMcM?

The size of the discount is tied to the amount of purchases made with that card present. So if you make a lot of purchases you get a bigger discount per gallon at the gas station.

If you share the card or exchange it with others, the first one to use the discount gets that savings, the next person does not. The discount resets on use, and it can be re-established by the next set of purchases on the card.

What that does is creates an economic incentive for someone to use the same card (maximize purchases to maximize discount) and not share it (discount is one time only, and to the current holder of the card.)

you could still pool all the cards and split the reward between you, couldn't you?

In the US, most large grocery store offer a card that you can use which gives you various rewards, and in turn allows them to perform analytics on their customer base.

Historically, these rewards were related to coupons for products in the store. However, this means that there is no benefit to using your particular card instead of someone else's.

More recently, the grocery stores have added other bonuses. The one that I'm most familiar with is for fuel / petrol. They team up with some fuel brand, say exxon, and when you've purchased enough on your loyalty card, you get something like $0.05 of your per gallon fuel costs.

The scheme with the poster above breaks down, because you need the physical loyalty card to use the fuel discount, and it's unlikely that everyone is refueling their car an equal amount each week, and that everyone is purchasing an equivalent amount of product at the store each week.

Same goes for every one of the thousands of products we purchase, isn't it a waste of time, money, and national health to put the responsibility of researching products and services in the hands of individuals? Why are companies allowed to sell me snake-oil, cigarettes, and other harmful products?

Why isn't there a law that prevents marketing data from being tied to personal identifiable information?

and

http://www.forbes.com/sites/kashmirhill/2012/02/16/how-targe...

Show that individual data can be and is accessed.

I have given a lot of thought to this problem. I even had a startup once devoted to solving it. My current thinking is that some form of digital signatures--perhaps PGP--is the best solution to all of this. As I discussed in a previous HN thread, we have a long way to go before the PGP user experience is acceptable for most computer-literate people. (When I say "user experience," I mean much more than the GUI. I mean the whole process of learning about PGP, creating keypairs, signing keys, etc..)

Couldn't part of your alterations include the removal of that section? Just strike that out, in addition to the other changes you are making.

But that's an extremely long shot and it still needs to rely on the bank fudging the records first.

Yep, which is why he won the first case. The terms are ridiculous though (fee of $200,000 if the bank cancels the card), which is why I would expect it to be deemed excessive and thrown out (same as EULAs that demand someones firstborn).

I'm curious as to whether he's done something similar previously.

Side note: There's a little-known legal provision that lets people sue a tele/direct-marketer if you ask them to take you off their list and they still keep contacting you. You have to take down the company name, get the name of the caller and ask them if they have "do not contact/call" and to put you on it. If they keep calling you after that (I think 3 times is the limit within 30 days or so), you can take them to small claims court.

How's that supposed to work? Bank offers agreement. You offer totally different agreement although superficially similar. It's not altered. It's new. If bank agrees then I don't see how it could get away. After all they are big supporters of the rule that if you signed something you declared that you agree with it and if you actually don't it's your loss.

I was very surprised that the Russian court system found the contract valid. Surreptitious changing a contract prior to signing can make the contract invalid where I live. It might be a question of ill-intent, and that the court did not find it as such in this case.

Bank just offers you agreement to sign. Guy just offered the bank different agreement and the bank accepted it by signing.

Probably that's why in my country banks rather sends you already signed two copies of the agreement and you are supposed to sign both of them and send one back.