Be
it pre-contractual information in terms and conditions or information on the
processing of personal data in privacy policies, the truth is that the way
businesses provide information to consumers generally leaves a great deal to be
desired. In order to prevent this, and to better inform the informers, the
Behavioural Insights Team (BIT) published a ‘Best
Practices Guide’ on improving consumer understanding of contractual
terms and privacy policies. These evidence-based guidelines are aimed at
businesses and focus on ‘how’ to present information, rather than on the
‘what’.
This study had a dual-focus: consumer comprehension of online
contractual terms/ privacy policies and consumer engagement (i.e. the opening
of full contractual terms or privacy policies). The study produced interesting,
although not surprising, findings. In fact, the shortcomings of the information
paradigm have been repeatedly studied and analysed, both at a practical and at
a normative level. See, for example, what we previously reported here, here
and here.
From the 18 measures tested, 6 proved to be effective, meaning that they
showed evidence of increased consumer understanding or increased consumer
engagement. The most effective measures are the display of important or unusual
terms as Frequently Asked Questions (which increased comprehension in 36%), the
use of icons combined with summaries to explain key terms (which increased
comprehension in 34%) and telling customers how long it will take to read the
policy (which increased opening rates of full terms and policies in 105%).
Other effective measures include the use of illustrations and comics to explain
step-by-step actions and processes, telling customers when it is their last
chance to read information before they make a decision and showing customers
the terms in a scrollable text box instead of requiring a click to view them.
Also noteworthy is the fact that while BIT’s research showed that reducing a
policy’s reading age level did not change comprehension levels for general
customers, it showed evidence that such a measure helped people with lower
levels of qualifications (increased comprehension by 16.9%).
Funnily enough, considering social media trends, adding emojis to contractual terms is amongst
the measures that have no supportive evidence of increased understanding or
engagement. Besides, well-known techniques like shortening the terms and
conditions, using simpler language or resorting to summaries showed mixed
evidence, which means that although they worked in some cases, they did not
work in others. For example, presenting key points in a summary table increased
comprehension of terms included in the summary, but it also decreased
comprehension of terms not included in the summary. These findings show that a
mere language simplification-based solution is not enough to fix consumer
disinformation: measures such as simple language and summaries must be combined
with visualization.
The study – which was commissioned by the UK Government – also demonstrates
how regulators are well-aware of the consumer disinformation problem. However,
it is rare to see a legislative instrument (both at national and EU level)
incorporating explicit measures dealing with these (or with similar) findings.
The only recent exception at EU level is the General Data Protection
Regulation, which explicitly calls for ‘standardized icons’ and visualization
as a means to increase transparency in the pre-contractual stage. This study is
another reminder of the need for lawyers to work with information designers in
order to increase and improve visualization of their terms and conditions.
Finally, it is important to stress that even though the effective
measures led to an increase in consumer understanding and consumer engagement,
the final numbers did not go above 58% and 34%, respectively. In other words,
according to this study, around 40% of consumers still do not understand terms
and conditions, while 66% of consumers do not open the full policies, even
after the tested measures are implemented. This means that in order to reach an
almost complete comprehension of pre-contractual information – or to guarantee
that everyone understands what they are binding themselves to - we need
additional solutions and new approaches.
