The Aryavarth Express
Agency (New Delhi): A groundbreaking survey conducted by LocalCircles, India’s premier community social media platform, has unveiled the alarming extent of deceptive practices, known as “dark patterns,” plaguing the online banking sector in India. The survey, which amassed over 44,000 responses from users spanning 363 districts, sheds light on the pervasive manipulative tactics employed by online banking platforms, leaving consumers vulnerable and eroding trust in digital financial services.
The issue of dark patterns in online banking was brought to the forefront by M. Rajeshwar Rao, Deputy Governor of the Reserve Bank of India (RBI), who cautioned about their presence in the mis-selling of digital loans. Rao emphasized that these deceptive design interfaces and tactics are strategically used to lure users into undesirable behaviors, such as availing high-cost, short-term consumer credit disguised as instant loans. He strongly urged banks to bolster their security measures to combat cyber fraud and safeguard customers’ trust in the rapidly evolving technology-driven banking landscape.
The LocalCircles survey paints a grim picture, revealing that an astonishing 63% of respondents have fallen victim to hidden charges that were not transparently disclosed upfront but later debited from their accounts. These concealed fees often encompass annual credit card charges, money transfer costs, and even fees for transactional SMS services. The prevalence of such hidden charges raises serious concerns about the transparency and fairness of online banking practices.
Moreover, a staggering 41% of users reported experiencing interface interference, a tactic where their transactional flow is disrupted, and they are bombarded with offers for additional products or services. This invasive practice not only hinders the user experience but also exploits consumers’ vulnerability, pressuring them into making unintended purchases.
The survey also shed light on the issue of subscription traps, with 32% of respondents falling prey to this deceptive tactic. Users are effortlessly lured into signing up for new products or services online, only to find themselves ensnared in a labyrinth of recurring charges and arduous unsubscription processes. Many are compelled to physically visit bank branches, navigate through cumbersome paperwork, and endure unnecessary hassles to terminate these services.
Furthermore, a concerning 39% of online banking users reported experiencing the “bait and switch” approach, where the product or service delivered differs significantly from what they initially signed up for. This deceptive practice not only misleads consumers but also erodes trust and satisfaction in online banking services.
The survey results paint a troubling picture of the state of online banking in India, with dark patterns becoming increasingly pervasive and sophisticated. These manipulative tactics not only exploit consumers’ vulnerabilities but also undermine the government’s ambitious Digital India mission, which aims to foster a transparent, efficient, and inclusive digital ecosystem.
The LocalCircles survey underscores the urgent need for decisive action by consumer protection and banking regulatory authorities. The RBI and the Central Consumer Protection Authority (CCPA) have already acknowledged the existence of dark patterns in banking and have issued general guidelines to address the issue. However, the survey’s findings highlight the necessity for more targeted and stringent measures.
It is imperative for regulators to develop comprehensive guidelines specifically tailored to combat dark patterns in online banking. These guidelines should mandate transparent disclosure of all fees and charges, prohibit interface interference and subscription traps, and establish clear protocols for product and service delivery. Furthermore, strict enforcement mechanisms must be put in place to hold non-compliant platforms accountable and protect consumers’ rights.
The survey also reveals the need for heightened digital literacy among consumers. Educational initiatives should be launched to empower users with the knowledge and skills necessary to identify and safeguard themselves against dark patterns. By raising awareness and promoting digital literacy, consumers can become more discerning and assertive in their online banking interactions.
The LocalCircles survey involved a diverse sample of validated citizens, ensuring a representative view of the Indian online banking landscape. The respondents comprised 63% men and 37% women, with 45% residing in tier 1 cities, 31% in tier 2, and 24% in tier 3, 4, and rural districts. This widespread participation highlights the pervasiveness of dark patterns across various demographics and geographical regions.
As India’s leading community social media platform, LocalCircles plays a crucial role in empowering citizens and small businesses to raise their concerns and drive policy and enforcement interventions. By facilitating public discourse and serving as a bridge between the government and the public, LocalCircles contributes to the creation of a more transparent, accountable, and consumer-centric digital ecosystem.
The survey’s findings serve as a clarion call for urgent action to combat dark patterns in online banking. Regulators, banks, and digital platforms must collaborate to implement stringent measures, safeguard consumer rights, and restore trust in digital financial services. Only through concerted efforts and a commitment to transparency and fairness can India realize its vision of a truly inclusive and empowering digital economy.