If you've ever tried to cancel an online subscription service, you know how frustrating it is to navigate the buried links, faint fonts, and hidden pages.
Software as a service providers aren't in the business of helping you leave. They've built their business around recurring revenue, lower customer acquisition costs, higher customer retention, and lifetime customer value financial models.
The U.S. Federal Trade Commission knows this, and it's taking the first steps toward our increased user protection. Along with the International Consumer Protection and Enforcement Network (ICPEN) and the Global Privacy Enforcement Network, the FTC completed a
July 2024 study of 642 apps and websites. These groups set out to see just how well – or poorly – subscription services were treating us.
Dark patterns is the phrase the FTC has adopted to describe how subscription apps and websites are manipulating us, benefiting the SaaS companies, and putting our privacy at risk. Dark patterns are commonly used design techniques that force us to take an action that benefits the company or give up more information than we should.
The study found that 75.70% of the companies used at least one dark pattern and 66.82% used more than one. Only 156 companies were found to be free of any dark pattern tactics. Here are 7 of the tactics we're all victimized by.
7 Common Dark Patterns SaaS Companies Use to Manipulate Users
1. Sneaking. This is one of the most common dark patterns found in the study. Some of the frequently used tactics include:.
Adding new non-optional charges to the price right before checkout. This is also known as drip pricing.
Automatically renewing a subscription at the end of a free trial without your permission.
The inability to turn off the subscription's auto-renew feature during the initial signup flow.
81% of the sites reviewed use this sneaky tactic to ensure subscriptions are automatically renewed. The overwhelming majority of these companies (70%) did not include information about how to cancel or the timeline required (67%) to avoid automatic billing.
2. Obstruction. This makes a task flow cumbersome for the user and more advantageous for the company. It's often seen when the cancellation flow is more difficult than the initial signup. Making the unsubscribe font small or barely visible is all too common.
3. Forced Action. Users are required to complete actions or provide additional information to access certain functionality. More than 66% of the companies studied required credit card information for the free trial signup.
4. Social Proof. Playing to our FOMO brains, 21.5% of the providers nudged buyers with the supposed behaviors of other customers like them. We've all experienced this not so subtle "x people bought this in the last hour." The most popular and number of purchases made are also attempts to influence immediate buying behavior.
5. Interface Interference. Information and options are delivered in a way that favors the company instead of the customer. This includes:
Presenting pre-selected options where the choice is most favorable to the company.
Upselling other unrelated products and services such as Microsoft 365 with web hosting. GoDaddy, for example, offers a pre-selected 365 subscription with a new hosting account.
We found that one client had done exactly what GoDaddy steered them toward, paying for an unused and unnecessary 365 account. Auto-renew was, of course, enabled too.
Confirmshaming is a popular way for companies to emotionally manipulate the customer's decision-making. It's human nature to be influenced by phrases like, "Renew now. Your valuable service is about to expire!" and "We don't want you to miss out on this amazing one-time offer!".
False hierarchy places the longest subscription term first in the dropdown list of selections. This is especially misleading because the advertised anchor price is often the longest term option. Again, we've seen this with web hosting companies that place a 3-year term at the top of the selections.
6. Urgency. Only x number of products left. Only x hours/days left before the offer expires. We've all been targets of these not so subtle buy now prompts.
7. Nagging. Sending repeated reminders to do something that benefits the company such as buy before your subscription or service expires. Even when you've opted out of renewing or buying, the reminders persist.
Hopeful Takeaway from the FTC's Initial Study
The FTC's participation in this study suggests that it is planning to increase its focus on SaaS customer fraud. With the recent D.C. Federal Court decision that Google is a monopoly, and the Justice Department's suit against the Apple Store, our customer protection appears to be getting much-needed attention.
Linda Rolf is a lifelong curious learner who believes a knowledge-first approach builds valuable, lasting client relationships. 