Behavioral insights for online TOS, disclosures, and policies

Here’s a report from the OECD on how to leverage behavioral insights for better complex communication design.

A short summary:

 

Governments should be wary of exacerbating information overload when setting mandatory information requirements for businesses.

Governments should also bear in mind the importance of form and context in developing such requirements. In particular, governments should consider not just what information consumer need but also when is the best time for consumers to receive such information, and in what form. Before introducing or changing disclosure requirements, governments should test these with consumers where possible. Governments should ensure that consumers are protected from false and misleading information, both online and off. This includes misleading pricing practices such as drip pricing and bait pricing, and the framing of pricing and offers that consumers cannot easily process.

Businesses should not rely on terms and conditions to communicate material information to consumers. Such information should be presented to consumers at a relevant stage of the decision making process and in a clear and salient way. In the case of standard form contracts, governments should ensure that consumers are protected from unfair contract terms since few consumers read terms and conditions and in any case have no ability to negotiate these. Personalisation of disclosures could improve consumer comprehension but could also raise new consumer issues.

This is an area that would benefit from more research. For more complex products and services (e.g. financial products and services, telecommunication services and energy services), including those with usage based pricing, consumer access to information (including on usage) in a machine readable form should assist comparison shopping and facilitate switching, potentially with the help of intermediaries.

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