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Banks making it hard to close accounts comes under dark patterns, says Zerodha's Nithin Kamath

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Nithin Kamath, the billionaire who co-founded Zerodha with his brother Nikhil Kamath, said that banks making it hard for customers to close an account comes under a "dark pattern", and there should be regulation on this.

Nithin wrote, "A colleague had to visit a bank branch offline to close a personal loan he took online. This branch was one of only 2 in Bangalore. It's the same with many other banks. Making it hard to close an account is a dark pattern, and maybe there should be regulations on this."

He further said that the Securities Exchange Board of India (SEBI) mandates all stock brokers to provide a facility to close accounts online. Nithin highlighted that Zerodha is one of the few brokers in the country to allow online transfer of stocks to demat accounts outside Zerodha.

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What does the Indian government say about 'Dark Pattern'?

Earlier in July, The government said it had identified nine 'dark patterns', or tactics used by online platforms to manipulate consumers. Some patterns include creating a false sense of urgency, adding products to the cart without consent, forcing users to sign up to access content, confirm shaming, hidden costs and nagging. 

Earlier this month, The government released guidelines for public consultation. The draft defines “dark patterns” as “any practices or deceptive design patterns using UI/UX (user interface/user experience) interactions on any platform; designed to mislead or trick users into doing something they originally did not intend or want to do; by subverting or impairing the consumer autonomy, decision making or choice; amounting to a misleading advertisement or unfair trade practice or violation of consumer rights.”

For instance, “false urgency” is a dark pattern under which the online seller makes false claims of limited stock (“hurry, only two items left!”) which misleads the user/buyer into making an immediate purchase or acting immediately.

The draft guidelines, once notified, shall apply to all platforms systematically offering goods or services in India, advertisers and sellers.

The document specifies 10 types of dark patterns: False urgency, basket sneaking, confirm shaming, forced action, subscription trap, interface interference, bait and switch, drip pricing, disguised advertising and nagging.

What is Dark Pattern?

A "dark pattern" is a term used to describe user interfaces that are designed to manipulate users into taking actions that may not be in their best interest but benefit the business or organization behind the website or app.

These manipulative designs can trick users into spending more money than they intended, giving away more personal data or making choices they wouldn't have made otherwise. The term was coined by user experience expert Harry Brignull in 2010.

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