In the age of everything online, people are now highly vulnerable to falling for digital manipulations. A recent survey by Local Circles, a consumer engagement platform, found that around 61 per cent of its respondents who purchased an online insurance policy experienced a subscription trap where the platform made it difficult for them to cancel it afterwards. widespread use of deceptive practices known as "dark patterns" by online insurance platforms. The survey report details certain practices that are designed to manipulate and mislead consumers into making purchases that are based on false advertisements.
As an increasing number of consumers take to the internet to buy or renew insurance policies, complaints of mis-spelling or manipulative selling called ‘dark patterns’ in the online world, have risen on LocalCircles in the last 9 months.
The survey conducted by Local Survey received over 36,000 responses from insurance consumers located across 309 districts of India. It found that:
- 61 per cent of the respondents who purchased online insurance plans faced a subscription trap wherein they could not cancel the policy afterwards
- 86 per cent reported that such platforms frequently used a nagging approach where they bombarded the buyers with messages when trying to get a quote or cancel their policy
- 57 per cent of respondents said insurance platforms frequently initiated forced prompts seeking unnecessary personal details to provide a quote. Consumers also received unsolicited information that showed a blatant misuse of personal details.
The survey highlighted a major concern for online insurance buyers in India who are tricked by insurers using dark patterns. Online insurance buyers face a multitude of risks such as:
Unwanted Purchase: Online platforms often mislead buyers and make them complicit in the purchase of unwanted plans.
Subscription traps: Consumers are lured into wrong deals by being nudged into purchasing insurance plans before they can explore all the suitable options.
Data theft: Forced action tactics put consumers' data at risk, they raise questions regarding how personal information is stored and used without any transparent knowledge.
Wrongful sale of insurance policies ranging from life, health, motor, property, or any other insurance, is a common occurrence where the insurance agents or officials often don’t tell what all the policy doesn’t cover. They often hide the drawbacks of a particular policy and try to hard-sell plans in an attempt to meet their targets.
People often end up trusting the agent and don't read the full document during the consideration when the policy can still be returned without incurring any financial loss. Most people are not even aware that there is a provision for the insured to return or cancel a policy when an insurance company misleads you and sells a product by hiding important information.
