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Recently, the FTC and the CFPB have prioritized digital dark patterns for rulemaking and enforcement actions, but what are ”digital dark patterns” and why do they matter to the ARM industry?

Digital Dark Patterns are defined as website design, features, and interfaces used to deceive, steer, and manipulate users. Though FTC and CFPB seem to be focused on website features that “trick or trap” consumers into making online purchases, the ARM industry should be paying attention to the potential for this concept to move to debt collection.

The FTC released a report on September 15, 2022, Bringing Dark Patterns to Light, that spotlights dark patterns used in a variety of industries and contexts that include:

• Misleading Consumers and Disguising Ads – These tactics included advertising designed to look like editorial content; comparison shopping sites; and countdown timers leading consumers to believe they only had a short time to receive savings on a product or service or that the quantity of a product was running low and they needed to make their purchase quickly. 

Do you “advertise” settlement offers on your website that have a time limit?

• Making it difficult to cancel charges or subscriptions – In the FTC’s case against ABCmouse, they alleged the online learning site made it difficult to cancel free trials and subscriptions even after promising “easy cancellation.” 

This is very close to having clear and conspicuous opt-out language.

• Burying key terms and junk fees – Some dark patterns hide or obscure fees and terms that contain material information for consumers to make a purchase, payments or subscribe to a service. In the FTC’s case against LendingClub, the agency alleged that the lender hid the loan fees behind tooltip buttons and in between more prominent text. 

This should trigger concern regarding disclosures being the same size text or larger than the main text on your website.

• Tricking consumers into sharing data – These dark patterns can be presented to consumers as making choices about their privacy settings or allowing the sharing of the consumer’s data but steer the consumer toward an option that gives away the most personal information. The FTC has alleged that VIZIO, a television maker, defaulted their smartTV settings to allow the company to collect and share a consumer’s viewing activity with 3rd parties and only provided the consumer a brief notice of that practice in a way that it could be easily missed. 

Do you track your website traffic? If so, what do you do with that information and is there a notice on your website that informs consumers of that practice?

This is a lot to think about. 

There was an entire session about Digital dark patterns at this year’s 2023 RMAI Annual Conference. One of our Research Assistant members shared her takeaways and the actions she took immediately upon return from the event to proactively combat this threat, which include: 

• Briefing her management team, QA, and Compliance teams about the session and the FTC bulletin. She shared screen shots of samples during her briefing.

• Advised her management team that she would be adding screening for digital dark patterns to her vendor management processes for existing and prospective clients and vendors. While her initial focus will be on web-based service providers, all suspicious activity or findings from the vendor/client audits will be reported to her as the CCO for further review.

• Managers were directed to share the information she provided with their teams and training is being developed. Her team will be listening and watching for consumer complaints regarding potential digital dark patterns.

While these are great suggestions, you and your organization should discuss what actions you are going to take to protect the company, its clients, and consumers.

Documents and Crowdsourced Materials:

• Member Questions: Wearable Technology, SoloSuit, and System Penetration Testing.

• Sample Settlement Email sent by SoloSuit

• Member Questions: Florida Collections and Credit Reporting

Top Reads:

• 2nd Cir. Holds FCRA Does Not Apply to Inaccuracies Involving Legal Disputes

• New CFPB Report and Blog Post Look at Third-Party Debt Collections Tradeline Reporting and Medical Debt Furnishing

• “Personal Recessions” and Three Other Consumer Trends to Watch in 2023

Upcoming Webinars/ Other Announcements:

• Streamlining Audit Processes – February 28th at 2pm ET (Register Here!) 

• Research Assistant sponsor Provana has a new resource page just for Research Assistant members. Check out the new Provana resources and check in for special offers right here. 

• Reminder: Send any topics or questions that you want to discuss to sara@insidearm.com by Thursday to ensure it makes it on our agenda!