The “Hotel California” subscription, or the one you can never leave. The relentless pop-ups triggering your fear of missing out. Hidden costs. Confusing terms and conditions. “Confirmshaming”, where companies make you feel like an idiot when you try to opt out of their emails.
These are among the “dark patterns” used unfairly by companies to nudge, manipulate, exploit and trick consumers into handing over money or data.
Now, the federal government is considering ways to stop those practices, which are currently not egregious enough to be illegal.
A Treasury consultation paper, released on Thursday, looks at options to crack down on how companies target vulnerable people, use “predatory or aggressive business conduct”, make it hard to opt out of cancelling goods or services, or mislead people through omitted, hidden or overly complex information.
It warns specifically of “subscription traps”, where consumers struggle to cancel subscription payments or stop them starting once a free trial has ended.
The Consumer Policy Research Centre (CPRC) published a report last year that found more than eight in 10 Australians had experienced at least one negative consequence because of design features influencing their behaviour, with one in four sharing more personal information than they wanted to.
It identified 10 strategies:
Hidden costs such as care plans or insurance;
Disguised advertisements that link to external sites;
Trick questions with confusing options for data consent;
Scarcity cues that instil a fear of missing out (Fomo);
Activity notifications about what other consumers are doing;
“Confirmshaming”, which makes consumers feel guilty or silly for opting out (such as ‘no thanks, I prefer to pay more’);
“Hotel California” or forced continuity, which stops customers cancelling online subscriptions or services;
False hierarchies where consumers are nudged towards a “preferred choice”;
Redirection or nagging such as with pop-ups;
Data-grabbing by forcing consumers to create profiles or having a default.
The CPRC chief executive, Erin Turner, welcomed the Treasury consultation and pointed to laws in Europe, US, UK and Singapore that have “effectively stopped harmful practices that still continue in Australia, like when businesses trap people into paying for unwanted subscription services”.
“We have protections to stop businesses from lying to customers, but we have lagged when it comes to stopping them from treating customers unfairly,” she said.
Research published by ING earlier this year found the average Australian could save up to $1,261 a year by cancelling subscriptions, memberships and apps they don’t use.
ING estimates unused and forgotten recurrent spending could cost Australia $8bn a year.
Choice’s senior campaigns and policy adviser, Alex Soderlund, said the consumer organisation had been calling for reform for years and was pleased to see progress.
“We’ve unfortunately recently seen more examples of unfair business practices, ranging from businesses who make it extremely difficult to unsubscribe from an online service, to companies using aggressive sales tactics to sell unaffordable, poor-value products to people living in remote Indigenous communities,” she said.
“During a cost-of-living crisis, it’s especially crucial that we stamp out unfair business models and practices that cost people time and money.
“Nobody likes to feel tricked, trapped, pressured or exploited, but unfair business practices will only continue to proliferate until we close the gaps in Australia’s consumer laws.”
The government’s consultation paper, Protecting consumers from unfair trading practices, identifies four options for dealing with practices not covered under existing laws.
They are doing nothing; amending current laws on “unconscionable conduct” to include unfairness; putting a general prohibition on unfair practices; or a combination of general and specific prohibitions on unfair practices.
The assistant treasurer, Stephen Jones, said the government had its sights on “the tricky tactics that confuse and frustrate Australians”.
Unfair trading practices undermined competition and manipulate consumer choice, he said.
“They’re also just downright annoying. Despite not passing the sniff test, many of these shifty tactics currently fall outside the reach of consumer law.”
The consultation is open until 29 November.
