The Department for Business, Energy and Industrial Strategy ("BEIS") has published guidance for businesses to help consumers understand the terms and conditions and privacy policies applicable to them. This guidance was created with the aim of 'helping build consumer trust and protecting brand reputation' – key concerns of businesses generally, but especially those operating online retail platforms.
The guidance draws on evidence-based research created by the Behavioural Insights Team, who worked in collaboration with regulators and academics to design a number of ways and techniques that could help improve consumer understanding of general and data protection terms and policies.
Such techniques are summarised in Section 3 of the guidance, which include:
displaying key and onerous terms as frequently asked questions;
providing information to consumers in small/short chunks, at the right time;
using illustrations and comics to explain step-by-step actions and processes (for example, returns processes/options);
telling consumers how long it would take to read the terms and policies;
telling consumers when their last chance to read information before they make a decision is;
adding examples to full terms (to relate them back to the consumer in specific scenarios);
using simpler language; and
adding emoji symbols to terms and policies to add visual context to them.
The guidance goes even further in Sections 4, 5 and 6, which set out techniques that have been shown to increase the rate at which consumers open business' terms and policies; techniques which have mixed evidence; and techniques which have little or no evidence (but may still be useful), respectively.
Why is this important to businesses?
Both consumers and businesses suffer when consumers do not know or understand businesses' terms and policies.
As the BEIS technical report highlights, "for consumers, low levels of readership and comprehension can leave them vulnerable to detriment such as unexpected costs and unintentionally sharing their data, and for businesses, resolving disputes with consumers over contractual terms can be time consuming and costly". Yet, even with such disadvantages, research has shown that a very low proportion of customers actually read businesses' terms and policies, and even when they do, consumers don't always understand them.
As such, the BEIS' proposed techniques are useful for businesses to implement in order to improve customer experience and create greater transparency, which in turn are likely increase consumer trust in the business, and therefore the volume of purchases made. Given the negative impact that the retail crisis has had on businesses more recently, businesses would benefit from applying the techniques recommended by the BEIS' guidance, particularly as they are generally low-cost and easy to implement.
Finally, whilst the BEIS' guidance is not legally-binding and only advisory, it relates to legal requirements on businesses to ensure that their terms and policies are in plain and intelligible language that consumers can understand. Therefore, businesses would do well to ensure that they review their current terms and policies and assess where they may be able to implement any of the techniques proposed by the BEIS' guidance.
Fieldfisher has a depth of knowledge and experience in drafting, reviewing and advising on business-to-consumer (and business-to-business) terms and policies. For more information or advice on how to ensure that your business' terms and policies are effectively communicated to consumers (and therefore in line with the applicable laws and regulations governing business-to-consumer relationships), please contact James Corlett at Fieldfisher.
Co-authored by Arwa Abdeh.