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Federal Trade Commission Warns of Sophisticated Dark Patterns Used to Trick Consumers

The Federal Trade Commission (FTC) released a written report Thursday about how exactly companies deploy dark patterns in advertising for enticing potential prospects, manipulating them into making purchases and quitting their privacy along the way.

Our report shows how a growing number of companies are employing digital dark patterns to trick people into buying products and offering their private information, said Samuel Levine, director of the FTCs Bureau of Consumer Protection. This reportand our casessend an obvious message these traps will never be tolerated.

Dark patterns include many oft-used marketing techniques such as for example ads posing as independent content, burying terms in corporate jargon, tricking customers or guests into quitting personal data, utilizing deceptive colors, pre-checked consent boxes, language and emotion to coerce customers into making purchases, deceptively registering for content, tricking customers into recurring charges, and rendering it extremely difficult to unsubscribe.

The higher usage of e-commerce recently has managed to get easier for companies to focus on consumers with a number of tactics.

The FTC report, titled Bringing Dark Patterns to Light (pdf), examined how these tactics can obscure, subvert, or impair consumer choice, and could be violating consumer protection laws. Based on the report, the FTC has sued companies utilizing such tactics to deceive customers.

FTC Versus LendingClub

The FTC sued online lender LendingClub Corp. in 2018 following the company falsely marketed no hidden fees, when the truth is, the business deducted hundreds as well as thousands in hidden up-front fees from the loans.

Another allegations against LendingClub were that consumers were misinformed about being qualified to receive loans if they weren’t, and taking money from consumers bank accounts without authorization.

After judgment was passed, LendingClub consented to pay out a lot more than $9.7 million to 61,990 consumers who have been charged hidden fees.

The FTC has outlined three main principles for businesses when advertising:

  • Disclose clearly and accurately the material terms of the sale contract such as for example costs, deadlines to cancel, frequency of charges, and disclosure of essential information.
  • Have the customers informed consent prior to the payment is manufactured.
  • Offer an quick and simple cancellation process.

Failure to adhere to certain requirements may bring about the FTC taking action.

Refunding ABCmouse Subscriptions

In 2021, the FTC sent refund payments totaling a lot more than $9.7 million to nearly 207,000 consumers of ABCmouse who have been automatically billed for renewals, along with those that were prevented from canceling memberships.

ABCmouse advertised Special Offer 6- or 12-month memberships, but didn’t inform customers that their subscriptions will be automatically renewed. The marketing practice ran from 2015 to at the very least 2018 and resulted in a large number of customers having their subscriptions renewed and charged for memberships without proper consent.

In line with the settlement (pdf), ABCmouserun by online education company Age of Learning Inc.was necessary to change its negative option marketing and billing practices to stay the FTC charges, including misrepresentations about cancellations and failure to reveal important info to consumers.

Naveen Athrappully

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Naveen Athrappully is really a news reporter covering business and world events at The Epoch Times.

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