New database puts contractual fine print in layman’s terms

David Hirsch’s epiphany came a few years ago as he was reviewing the contract for a college-savings plan for his daughter. The contract was riddled with fine print and legal gobbledygook.

“I couldn’t understand it at all,” said Hirsch, 51, of Malibu, Calif. “First I got furious. Then I got inspired.”

The once-and-future Internet entrepreneur is putting together a database called the National Fine Print Repository. When it’s unveiled to the public in coming months, it will provide a resource for people to get clear explanations of what may lurk in that cellphone or credit card contract.

Last week, Hirsch took the wraps off his new company, Transparency Labs, with a presentation at Finovate, a financial-technology event in New York.

“This fine-print world we’re living in, it’s bad for consumers, it’s bad for business, and it’s bad for the country,” he said. “You’ve got people not understanding what they’re agreeing to, and they’re getting clobbered.”

We all know what Hirsch is talking about: weasel words in contracts that allow a company to change the terms at any time, or that lay the groundwork for sky-high fees, or that forbid a consumer filing a lawsuit.

Think of the National Fine Print Repository as a sort of CliffsNotes for contracts. Users will run a search for whatever company they’re doing business with. If the contract is in the database, an easy-to-understand summary of key provisions will pop up.

Hirsch said about 20 people are reading and summarizing contracts for the database. Their explanations will be written so they can be understood by anyone with a ninth-grade reading level.

The database already contains about 2,000 contracts for banks, credit card issuers, cellphone companies and retirement accounts, Hirsch said. In the future, the scope of industries will continue to expand.

Hirsch said he hopes to make the database available to consumers by early 2012.