Wallet bludgeoning users flag, postpaid balance
Paytm has started clubbing the limit of its postpaid product with the wallet balance, resulting in an inflated balance being displayed, Ken reported June 6. The feature is designed in such a way that even if the wallet balance is depleted, the remaining amount is covered by the available postpaid balance.
Why is this important: Postpaid or Buy Now Pay Later (BNPL) products are essentially loans. If you don’t repay them on time, not only will Paytm continue to charge interest on the amount to be repaid, but your credit score is likely to be affected. Some Paytm users have taken to Twitter to report issues they’ve been facing since the fintech giant rolled out the new measure.
Deployment Complaints: “My dad didn’t know when he was using Paytm Postpaid. The only guess I can make here is that one of the payments he thought he was making through his wallet/UPI was sneakily slipped into postpaid. And because of that “dark pattern“Through Paytm, he received more than 10 loan repayment calls from Aditya Birla,” tweeted Venkat Raju, a Delhi-based business communications expert. Raju traced the transactions to his father’s bank account only to find that the “loan” that Aditya Birla was suing his father for is, in fact, his post-paid Paytm dues.
One clue that stood out was that the Aditya Birla loan account number started with the alphabets ‘PYTMPPABFLXXXXX’. I immediately check if Dad had a Paytm payment bank account. He did not do it. The next obvious alternative was a pay-later program through Paytm.
—Vivek Raju (@vivekraju93) June 6, 2022
Now is the time for the “yes ackchually” types to come and say “oh if you’re so smart, then how would YOU do it?” They separate the two payment methods and clearly show the balances. pic.twitter.com/YRfEH6Km0r
– Roses are red, and so are beets, Chandra went and (@NCResq) June 6, 2022
What is a dark pattern: Dark Patterns are deceptive user interface interactions, designed to trick or trick users into doing something they don’t want to do. The term was coined specifically in reference to e-commerce businesses, whose designers began creating deceptive user interfaces to manipulate users to drive more sales, get subscriptions, and hit target numbers in transactions.
Does India have any protection against such practices: No, India does not have safeguards against companies adopting such changes. In India, Non-Banking Financial Companies (NBFCs) categorized into different sections based on what they can lend but these companies are essentially allowed to freely set their terms and conditions (although there is an interest cap).
Are other governments taking action against UI manipulation: The UK Consumer Law Update illegalized two major dark pattern formats. The “sneak into cart” model where additional items and services are added by default and “hidden costs” like undeclared subscriptions, extra shipping or additional items, are now illegal. Meanwhile, in the United States, three individual states – California, Colorado and Virginia — recognized dark patterns in their definition of consent. California privacy rights law states that “agreement obtained through the use of dark models does not constitute consent”, defining “dark models” as “a user interface designed or manipulated with the substantial effect to subvert or alter the autonomy of the user”.
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