
A survey conducted by LocalCircles revealed that as many as six out of ten consumers of online insurance sales and service platforms have experienced dark patterns such as nagging, subscription traps, and forced actions. These dark patterns compromise the users’ choice, value, coverage benefits, and data.
The survey found that 61% of those who purchased an insurance policy online experienced a subscription trap, where the platform made it difficult for them to cancel the policy. Additionally, 86% of respondents stated that the platforms frequently used a nagging approach when they tried to obtain an insurance quote or cancel a policy. Furthermore, 57% of respondents reported that platforms frequently sought unnecessary personal details to provide a quote and sent unsolicited information or misused personal information.
The rise of online insurance sales and service platforms has led to an increasing number of consumers facing dark patterns. These manipulative selling tactics, also known as dark patterns, have become a concern for consumers in the last nine months.
Government Action and Consumer Protection
Given the prevalence of dark patterns in the online insurance sector, the survey suggests that the government, through the consumer rights regulator CCPA (Central Consumer Protection Authority), and the insurance regulator IRDAI (Insurance Regulatory and Development Authority of India), should take further action to protect consumers.
Lack of Transparency and Consumer Trust
The survey also highlighted issues related to the lack of transparency in the insurance sector. Insurance agents or officials often fail to inform consumers about the coverage limitations or drawbacks of a particular policy compared to others. They may also engage in hard-selling tactics to meet their targets. While there are provisions for consumers to return or cancel a policy when important information is hidden, many people trust the agent and do not thoroughly read the policy document during the consideration period.
Prohibition of Dark Patterns
The Indian government, through the Central Consumer Protection Authority (CCPA), has taken steps to address dark patterns. In November 2023, the CCPA notified the prohibition of 13 types of dark patterns, including false urgency, subscription traps, forced actions, and trick questions. These dark patterns are considered misleading advertisements or unfair trade practices that violate consumer rights.
Impact of Dark Patterns
Dark patterns can have various effects on consumers. For example, the forced action dark pattern may lead consumers to believe that they cannot obtain a quote or make comparisons without following the directions of an online platform. This can result in consumers disclosing personal information they would not have shared otherwise. Similarly, false urgency is created by falsely informing consumers that a product is only available for a limited time, which discourages users from reading all available information.
Conclusion
The prevalence of dark patterns in the online insurance sector is a cause for concern. Consumers often face manipulative selling tactics such as nagging, subscription traps, and forced actions. The lack of transparency and consumer trust further exacerbate the issue. The Indian government has taken steps to address dark patterns, but further action is needed to protect consumers and ensure a fair and transparent insurance marketplace.