A recent survey conducted by LocalCircles highlights widespread manipulative selling practices in the online insurance sector, with six out of ten consumers reporting experiences of dark patterns such as nagging, subscription traps, and forced actions.
The survey indicates that users of online insurance sales and service platforms often encounter dark patterns that undermine their choices, coverage benefits, and data security. According to the survey, 61% of respondents who purchased insurance policies online encountered subscription traps, where platforms made it challenging to cancel subscriptions.
Furthermore, 86% of respondents reported persistent nagging from platforms when seeking insurance quotes or attempting to cancel policies. Additionally, 57% of respondents experienced forced actions, where platforms required unnecessary personal details to provide quotes and subsequently misused this information or sent unsolicited messages.
As more consumers turn to the internet for buying or renewing insurance policies, complaints of mis-selling and manipulative practices—referred to as dark patterns in the digital world—have surged over the past nine months.
Given the high prevalence of dark patterns among online insurance buyers, the survey stresses the need for government intervention. It calls for the Central Consumer Protection Authority (CCPA) and the Insurance Regulatory and Development Authority of India (IRDAI) to take further action to safeguard consumers.
The survey gathered over 36,000 responses from insurance consumers across 309 districts in India, with 66% of respondents being men and 34% women.
The survey also points out that insurance agents often fail to inform clients about policy exclusions or drawbacks, or aggressively push policies to meet their targets. Although there is a provision allowing insured individuals to cancel a policy if misled, many consumers trust their agents and neglect to read the full policy documents during the consideration period, missing the opportunity to cancel without financial loss.
These findings coincide with the government’s recent move to address dark patterns. In November 2023, the CCPA notified the prohibition of 13 types of dark patterns, including false urgency, basket sneaking, confirm shaming, forced action, subscription traps, interface interference, bait and switch, drip pricing, disguised advertisements, nagging, trick questions, SaaS billing, and rogue malware. According to the CCPA, dark patterns constitute misleading advertisements, unfair trade practices, or violations of consumer rights.
Forced action patterns, for instance, lead consumers to believe they cannot obtain quotes or comparisons without following specific platform directions, often resulting in the disclosure of personal information. Similarly, creating a false sense of urgency can pressure consumers into making hasty decisions without fully understanding the information provided. Some websites use pre-selected options or false hierarchies to promote certain choices or obscure others, further disadvantaging consumers.
