Search results for: Dark Pattern

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On September 4, the California Privacy Protection Agency (“CPPA”) issued an Enforcement Advisory cautioning businesses against the use of “dark patterns” in their consumer-facing user interfaces. The California Consumer Privacy Act (“CCPA”) defines the term “dark pattern” as “a user interface designed or manipulated with the substantial effect of subverting or impairing user autonomy, decision making, or choice” when asserting their privacy rights or consenting.

Under the CCPA, “agreement obtained through the use of dark patterns does not constitute consent.” The advisory accordingly highlights that the effect on consumers, rather than a business’s intent, is the relevant consideration in determining what constitutes a dark pattern. The advisory further emphasizes that user interfaces should offer “symmetrical choices” that are clear and balanced when providing consumers with the option to transact or share privacy information. Specifically, the advisory recommends that businesses should ask themselves the following questions in assessing whether their user interfaces present consumers with compliant choices:

  • Is the language used to communicate with consumers easy to read and understandable?
  • Is the language used straightforward and does it avoid technical or legal jargon?
  • Is the consumer’s path to saying “no” longer than the path to saying “yes”?
  • Does the user interface make it more difficult to say “no” rather than “yes” to the requested use of personal information?
  • Is it more time-consuming for the consumer to make the more privacy-protective choice?

According to the CPPA, interfaces with dark patterns obscure or delay the process for consumers to opt out of sales or the sharing of their personal information. Another example offered in the advisory is an interface with cookie choices that only allow consumers to choose between “yes” or “ask me later” options, in contrast with compliant interfaces offering clear “accept all” and “decline all” options.

Putting it into Practice:  The CPPA advisory indicates that dark patterns remain a key area of focus for regulators at both the state and federal levels (see previous blog posts here, here, and here). The advisory serves as a reminder for businesses to review their consumer-facing interfaces in order to ensure they do not run afoul of regulatory guidance on patterns. This also includes user interfaces that businesses deploy through service providers.

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On April 25, the FTC took action against a Washington-based bill payment company and its two co-founders alleging that the company used misleading search ads to impersonate consumers’ billers and deceptive design practices to mislead those consumers into paying “junk fees” they tacked on to consumers’ bills. 

Continue Reading FTC Calls Out Bill Payment Company’s Use of Dark Pattern Practices

On November 3, the FTC and a software company operating internet-based telephone services filed an agreed upon proposed court order, which includes a $100 million fine, following an FTC suit alleging that the software company participated in illegal dark patterns and charged junk fees. In its original complaint, the FTC alleged that the software company provided simple ways to sign up for their phone plans, but made it difficult to cancel those plans, and harmed consumers by:

Continue Reading FTC Action Alleging Dark Patterns Forces Software Company to Pay Damages and Adopt New Practices

On October 18, 2022, the CFPB sued a software company that manages online payment platforms claiming that it utilized unlawful enrollment practices to cause unknowing consumers to automatically enroll in annual subscriptions. According to the CFPB, the software company generated over $300 million in fees from approximately three million consumers through engagement in deceptive acts and “dark pattern” techniques in violation of the CFPA and EFTA by:

Continue Reading CFPB Sues Payment Platform as the Crack Down on Dark Patterns Continues

On September 15, the FTC released a report, Bringing Dark Patterns to Light, that shows an increase in the use of sophisticated “dark pattern” design practices by retailers intended to manipulate consumers into making decisions that benefit the retailers at the consumers’ expense. The report examined the use of dark patterns across a variety of industries and contexts, including e-commerce, cookie consent banners, children’s applications, and subscription sales. The report highlighted four common tactics:

Continue Reading FTC Reports Rise in “Dark Pattern” Tactics in Consumer Markets

On October 28, the FTC issued a new enforcement policy statement warning companies against deploying “illegal dark patterns” that trick or trap consumers into subscription services, and often making websites difficult to navigate to find cancellation or refund options.  The statement is intended to assist marketers by providing specific guidance on the FTC’s interpretation of existing law as it applies to “negative option marketing” through deceptive sign up tactics, including unauthorized charges or ongoing billing that is impossible to cancel.  The policy statement notes that “[n]egative option offers come in a variety of forms, but all share a central feature: each contains a term or condition under which the seller may interpret a consumer’s silence or failure to take affirmative action to reject a good or service or to cancel the agreement as acceptance or continuing acceptance of the offer.”  Examples include automatic renewals, free trials that convert to pay features, and continuous periodic shipments that continue until the customer cancels the shipment. Continue Reading FTC to Increase Enforcement Against “Dark Patterns” Directed at Consumers

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The Consumer Financial Protection Bureau (CFPB) released a comprehensive report today, outlining detailed recommendations to strengthen state-level consumer protection laws and address modern risks in consumer financial markets. The CFPB also provided a compendium of guidance documents summarizing its enforcement strategies and regulatory insights, designed to serve as a resource for state lawmakers and regulators.

Continue Reading CFPB Proposes Roadmap For States to Continue Regulatory Activity
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On September 13, the CFPB filed a complaint against a nonbank corporation and its CEO, alleging that the company engaged in deceptive and abusive acts through misleading advertising and unjustified, exorbitant fees related to its credit card program. The CFPB claims these actions violate both the Consumer Financial Protection Act and the Truth in Lending Act.

Continue Reading CFPB Cracks Down on Credit Services Provider for Gouging and Trapping Consumers
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On July 29, the FTC filed a stipulated order settling claims against an online career-training company on the grounds that it engaged in deceptive advertising. In addition to injunctive relief barring the company from engaging in deceptive acts, the order requires the company to pay a $15.7 million fine and cancel approximately $27.8 in consumer debt. 

Continue Reading FTC Settles Action Against Online Career-Training Company for Deceptive Advertising
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On May 17, the CFPB filed a lawsuit against a California-based fintech that operates a nationwide website and mobile-application based peer-to-peer lending platform through which consumers can obtain small-dollar, short-term loans. The Bureau alleges that while the company markets itself as offering 0% APR loans, its use of dark patterns ensures that almost every borrower pays a fee, in the form of a “tip” or “donation.” 

Continue Reading CFPB Sues Fintech for Deceptive Practices Surrounding Tipping Service