In recent years, and in particular since decisions like AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), a powerful defense to consumer class actions has been arbitration agreements that include class waivers. The Supreme Court’s recent decision in DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463 (2015) reinforces that defense, and assures that the use of arbitration agreements and class waivers will continue to be a powerful tool to use against consumer class actions.

But before Concepcion and Imburgia can apply, the consumer must be bound to an arbitration agreement—a task that is not necessarily straightforward. In Sgouros v. TransUnion Corp., — F.3d —, 2016 WL 1169411 (7th Cir. Mar. 25, 2016), the Court held that the plaintiff-consumer did not agree to arbitrate his claims when he purchased his credit score on TransUnion’s website.

When the plaintiff purchased his credit score, he had to complete three steps. Step 1 required the plaintiff to enter basic identifying information, and Step 3 verified his identity. Step 2, however, was critical. It required the plaintiff to pay via credit card, and he clicked a button that said “I Agree & Continue to Step 3.” Like many companies that offer products or services through the Internet, TransUnion used a “clickwrap” service agreement that required arbitration of disputes, and precluded the right to proceed as a class. This is what the window showing the service agreement looked like:

(Click here to view graphic on original article)

If the plaintiff had opened the “Printable Version” of the agreement, he would have seen on page 1 a notice that it contained an arbitration provision, and would have found that provision in full on page 8.

After the plaintiff filed suit, TransUnion moved to compel arbitration, arguing that he agreed to the entire “Service Agreement” shown above. The plaintiff opposed the motion, and the Court analyzed whether the service agreement bound the plaintiff.

As noted by the Tenth Circuit, “[c]lickwrap agreements are increasingly common and have routinely been upheld.” Hancock v. Am. Tel. & Tel. Co., 701 F.3d 1248, 1256 (10th Cir. 2012). Moreover, Illinois law (which the parties agreed applied) seemed to favor the arbitration agreement. For example, in Hubbert v. Dell Corp., 359 Ill. App. 3d 976 (2005), the Illinois Appellate Court reversed the trial court’s denial of a motion to compel arbitration where the terms of the arbitration agreement were in another hyperlink. The statement on Dell’s webpage, “All sales are subject to Dell’s Terms and Conditions of Sale,” coupled with a hyperlink to those terms, was sufficient to bind the consumer to arbitration.

But the Seventh Circuit, in a decision penned by Judge Wood, disagreed. First, the court said that unlike Hubbert and other cases, TransUnion’s website, even though it displayed a scrollable window titled “Service Agreement,” doesn’t say anything “about what the agreement regulated.” In other words, it didn’t say “The Service Agreement governs your relationship with TransUnion,” or something to that effect, unless the user opened the “Printable Version” or took the time to scroll down in the window.

Second, and “what clinche[d] the case for [plaintiff],” was what came after the box showing the words “Service Agreement” and before the button saying “I Accept & Continue to Step 3.” Here is what TransUnion said:

(Click here to view statement on original article)

By saying “you understand that by clicking on the ‘I Accept & Continue to Step 3’ button below” and including language that TransUnion can obtain the customer’s credit report only, according to Judge Wood, TransUnion “actively misleads the customer” about to what he or she is agreeing. “That text distracted the purchaser from the Service Agreement by informing him that clicking served a particular purpose unrelated to the Agreement.” Thus, Concepcion did not apply because the plaintiff was not alerted to the purpose of the service agreement or what it regulated.

Courts tend to scrutinize class waivers, thus companies should ensure that their clickwrap agreements can withstand this scrutiny. And any companies that seek to bind their customers on the Internet should take Judge Wood’s advice and place “the agreement, or a scroll box containing the agreement, or a clearly labeled hyperlink to the agreement, next to an ‘I Accept’ button that unambiguously pertains to that agreement.”