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“Free Trial”. “Easy Cancellation” “No Obligation.” Welcome to Roach Motel. It is one of the terms insiders use to describe deceptive online advertising practices that lure customers into accepting trial offers that have proven difficult or impossible to cancel, and the Federal A law that reigns supreme to the worst offenders as the Trade Commission ramps up its efforts to strengthen consumer protection.
Offering a limited trial that automatically converts to a paid subscription unless the customer actively cancels is called negative option marketing and is generally legal unless used deceptively. As most of us have experienced, this practice has become more common, with marketers making it harder to cancel, hiding or obscuring terms and services, imposing junk fees, and even subscribing. He is crossing the line more and more by actively arguing against the request to terminate the
Federal and state consumer agencies, including the FTC and the Consumer Financial Protection Agency, are reporting a surge in complaints about deceptive or fraudulent tactics, especially from older consumers. In his 10-year study conducted by the Better Business Bureau, 22 state attorneys general said misleading free trial offers cost consumers more than $1.3 billion during the period. Estimated.
Roach Motel’s Gambit is a broader form of gambit that uses knowledge of behavioral psychology to manipulate or deceive consumers into making unwanted behaviors, making unwitting purchases, or surrendering personal information. It’s just one example of an online marketing strategy. Marketing his specialist Harry Brignall, who studies deceptive marketing tactics in online interfaces, represents a wide variety of tricks, traps, and clickbaits that website and app designers apply to influence behavior. I coined the term “dark pattern” for this reason. Brignull maintains a website that explains various dark patterns and a “Hall of Shame” that features some of the more egregious cases.
One increasingly common tactic is to use pre-checked boxes to force users to make a purchase unless they specifically uncheck them. For example, some retailers that sell electronics may include a check box in fine print next to their extended warranty offer. This will automatically be added to the cart at checkout unless the consumer unchecks the box. Also known as a “sneak-in basket,” this deceptive tactic is also used by credit bureaus and his identity theft tracking system to covertly enroll users into auto-renewing membership services.
Some fundraising firms have been arrested for actively using this tactic.The biggest offender during the 2020 presidential election was President Donald Trump’s It was WinRed, a commercial fundraiser. WinRed makes hundreds of thousands of small donations in response to complaints about deceptive dark pattern tactics, including pre-checkboxes for repeating one-off donations or doubling donations to his I was forced to refund.
The ploy to persuade consumers to give up their information is common and is called “Zuckering” after Mark Zuckerberg, the founder of Facebook, the most prolific information-gathering enterprise in existence. Researchers have found that interacting with social media releases dopamine in the brain. This dopamine may encourage users to let go of personal information and perpetuate pleasant interactions. Designers of social media platforms deliberately take advantage of this well-documented relationship.
“Confirmshaming” attempts to make the user feel guilty or ashamed to act. Gmail shames users into updating to the latest version by clicking “Yes, I want it” with brightly colored options or displaying a simple plain text button that says “No, I don’t want smart mail.” I tried to guide you to
Fear of missing out is also a powerful motivator that creates a sense of urgency to buy. “There are only 2 more seats for him at this price”, “Limited stock” and “Hurry before this offer expires” are common and usually fake tricks are used. increase. Fake countdown clocks can also attempt to trigger immediate purchases rather than allowing comparison shopping and further research.
Then there’s the good old bait and switch, tricking consumers into buying something they didn’t expect. I got a popup asking for a software upgrade, but the action of the “X” in the corner of the window changed from closing the window to installing the upgrade. Clearly, this debacle was short-lived.
Marketing has always understood human psychology to drive purchase intentions, but the immediacy of online interactions and the interconnectedness of the financial system, including bank and credit card accounts, have increased stakes and swayed malicious intent. Some people are getting bolder. In its October 2022 policy statement, the FTC reiterates legal standards and strengthens enforcement actions for using negative option marketing. Specifically, marketers must clearly and conspicuously disclose the terms of their offers and obtain the consumer’s informed consent to purchase or subscription. The agency also says it is illegal to mislead or discourage customers who wish to cancel their subscriptions.
Consumers who face obstacles in canceling their subscription or feel misled or coerced may file a complaint with the Federal Trade Commission at reportfraud.ftc.gov. You should also review your bank and credit card statements for unexpected charges and file a dispute with your credit or debit card company if you are unable to successfully resolve the issue with the merchant.
And as always, watch out for emptors. We are exposed to deceptive tactics every day and it is up to each of us to find them and learn how to resist them.
Christopher A. Hopkins (CFA) is a co-founder of Apogee Wealth Partners.
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