Wherever non-compliance is found, an action plan with timelines for removing the dark patterns has to be submitted within one month, said the IRDAI.
Dark patterns involve using design and choice architecture to deceive, coerce, or influence consumers into making choices that are not in their best interest. Dark patterns encompass a wide range of manipulative practices such as drip pricing, disguised advertisement, bait and switch, false urgency etc.
Hyderabad:The Insurance Regulatory and Development Authority of India (IRDAI) has asked insurers to carry out a self-assessment around “dark patterns” — user interface designs that mislead or manipulate consumers into unintended actions, which is prohibited under law and prepare their status reports on compliance in 15 days.
Wherever non-compliance is found, an action plan with timelines for removing the dark patterns has to be submitted within one month, said the IRDAI..
The insurance regulator recently highlighted the need for regulated entities offering insurance products on e-platform to comply with the guidelines on Prevention and Regulation of Dark Patterns issued by the Central Consumer Protection Authority (CCPA) on November 30, 2023.
The move is in line with a broader regulatory push across the financial sector to curb deceptive digital practices. The Reserve Bank of India (RBI) has also flagged concerns around “dark patterns”, said the IRDAI.
Dark patterns involve using design and choice architecture to deceive, coerce, or influence consumers into making choices that are not in their best interest. Dark patterns encompass a wide range of manipulative practices such as drip pricing, disguised advertisement, bait and switch, false urgency etc.
Such practices fall under the category of “unfair trade practices” as defined under the Consumer Protection Act, 2019.
The Central Consumer Protection Authority, in exercise of the powers conferred by Section 18 of the Consumer Protection Act, 2019, has issued “Guidelines for Prevention and Regulation of Dark Patterns, 2023” on 30th November, 2023 for prevention and regulation of dark patterns listing 13 specified dark patterns.
To safeguard consumers from unfair trade practices in e-commerce, the Department of Consumer Affairs has also notified the Consumer Protection (E-commerce) Rules, 2020 under the provisions of the Consumer Protection Act, 2019. These rules inter-alia outline the responsibilities of e-commerce entities and specify the liabilities of marketplace and inventory e-commerce entities, including provisions for customer grievance redressal.
The CCPA has notified the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 on 9th June, 2022. These guidelines inter-alia provide for; (a) conditions for an advertisement to be non-misleading and valid; (b) certain stipulations in respect of bait advertisements and free claim advertisements; and (c) duties of manufacturer, service provider, advertiser and advertising agency.