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Paytm merges wallet and postpaid balance, users call out app’s ‘dark pattern’ design

Users pointed out Paytm showing a combined balance of wallet and postpaid which attracts interest and affects credit score

Paytm has begun clubbing the limit for its postpaid product along with the wallet balance, resulting in the display of an inflated balance, The Ken reported on June 6. The feature is designed in a way that even if the wallet balance runs out, the remaining amount is covered by the available postpaid balance.

Why it matters: Post-paid or buy-now-pay-later (BNPL) products are essentially loans. If you do not pay these back in time, not only will Paytm continue to charge interest on the amount to be repaid but chances are that your credit score might be affected. Some Paytm users have taken to Twitter to point out the problems that they have faced since the fintech giant rolled out this new measure.

Complaints about the roll out: “My dad had no idea when he used Paytm Postpaid. The only guess I can make here is that one of the payments he thought he was making via wallet/UPI was slyly slipped into postpaid. And due to this “dark pattern” by Paytm, he got 10+ loan repayment calls from Aditya Birla,” tweeted Venkat Raju, a business communications expert based out of Delhi. Raju traced the transactions on his father’s bank account to find out that the “loan” that Aditya Birla was pursuing his father for is, in fact, his Paytm post-paid dues.

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What is a dark pattern: Dark Patterns are deceptive user interface interactions, designed to mislead or trick users to make them do something they don’t want to do. The term was coined specifically in reference to e-commerce companies, whose designers started creating deceiving user interfaces to manipulate users in order to generate more sales, get subscriptions and hit target numbers in transactions.

Does India have any protection against such practices: No, India does not have any protective measures against companies adopting such changes. In India, non-banking financial companies (NBFCs) are classified into various sections depending on what they can lend but these companies are essentially allowed free reign to set their terms and conditions (although there is an interest cap).

Are other governments taking measures against UI manipulation: The UK’s updated consumer protection law has illegalized two major dark pattern formats. The “sneak into basket” pattern where additional items and services are added by default and “hidden costs” like undeclared subscriptions, extra shipping charges, or extra items, are now illegal. Meanwhile, in the US, three individual states — California, Colorado and Virginia — have recognized dark patterns in their definition of consents. The California Privacy Rights Act states “agreement obtained through use of dark patterns does not constitute consent”, defining “dark patterns” as “a user interface designed or manipulated with the substantial effect of subverting or impairing user autonomy”.

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