Consumers should have more visual information about terms and conditions when making purchases online, experts have said.
Making information more accessible and transparent helps improve understanding and memory, a new study shows.
Researchers have found people are more interested in and more likely to read legalities if they were given this information after their purchase. Pre-purchase reading times were only about half as long as post-purchase reading times, evidencing the lack of attention and interest in disclosures pre-purchase.
Shifting the obligation for companies to give more information after purchase could help to alleviate the current information apathy. Asking people to read disclosures after purchase meant the attention they paid increased between 41 and 162 per cent, and their understanding improved by between 14 and 21 per cent.
The study says consumers must be given the option either to access the full terms immediately and/or to save them for later reference if questions or concerns arise.
An experiment carried out by academics found visual cues, such as a one-pager or thematic icons, improve the reading time and understanding of disclosures, and researchers say policymakers should further consider prescribing their use.
The study was carried out by Joasia Luzak, from the University of Exeter, Alexander J. Wulf and Ognyan Seizov from the SRH Berlin University of Applied Sciences and Marco B.M. Loos and Mia Junuzović from the University of Amsterdam.
They interviewed judges, lawyers, consumer protection authorities and organizations, representatives of state institutions and traders in Croatia, Germany, Poland, the Netherlands, and the United Kingdom.
The interviews showed there were divergences in the understanding of the notion of transparency and how it should be applied between various organisations within the same country, not to mention internationally. This means without further guidance national courts will vary in their interpretation of the transparency requirements and consumer could expect different standards to apply across Europe.
As part of behavioural experiment with 835 British participants carried out as part of the study people were either given a densely written text-only disclosure, a linguistically optimised and neatly structured text-only disclosure, and a visually formatted one-pager that presented the main contractual stipulations in graphic form or a combination. They were asked three specific questions about compensation, return policy, and product characteristics to check how much of the disclosure they had read, understood and remembered.
When used alone, text was the least efficient communication medium. Moving to visually enhanced information dramatically improved both disclosure reading time and consumer understanding. Providing both textual and visual cues might have increased reading time, but it has also significantly improved understanding. For complex consumer transactions, where consumer understanding is key, like with consumer credit, researchers recommend combining these two disclosure methods.
Professor Luzak said: “Online transparency is important and should be improved. It helps reduce reading time, a precious resource in everyday lives, and helps purchases better understand and remember contract terms. Visual cues improve the reading time and understanding of disclosures, thus policymakers should further consider improving the transparency framework by prescribing their use.”
