ARTICLE · 22 NOVEMBER 2022

Payment Processors: Are You Prepared To Uncover "Dark Patterns"?

Venable LLP

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Risk management personnel who underwrite e-commerce merchants should have some basic understanding of the types of online merchant marketing and sales practices that are deceptive and misleading.

United StatesConsumer Protection

Shahin Rothermel

Risk management personnel who underwrite e-commerce merchants should have some basic understanding of the types of online merchant marketing and sales practices that are deceptive and misleading. More than a decade of law enforcement actions by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) against payment processors that failed to act on red flags-high chargebacks, consumer complaints, shell companies with straw owners, and other evidence of consumer harm-provide a catalog of merchant activities that regulators do not want processors to support.

The latest buzz in consumer protection has focused on "dark patterns," a term coined by a user experience designer in 2010 to describe manipulative tactics that induce consumers to complete an action that they would not have otherwise completed if they had understood what they were acting on at the time. These actions may drive unwitting consumers to purchase items, share

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