By Surbhi Sood, Senior Manager, MSC and Akhand Jyoti Tiwari, Senior Partner, MSC
India’s digital economy has transformed lives. Affordable smartphones and faster networks have enabled 969 million Indians to access the internet, with millions using apps for payments, savings, credit, and investments. These platforms are fast, convenient, and increasingly central to our financial lives.
But hidden within this convenience is a troubling reality: manipulative interface designs, or dark patterns. These are deliberate choices in app or website design that trick or pressure users into making decisions against their best interest—signing up for services they don’t want, paying fees they did not expect, or sharing more data than they intended.
The hidden traps behind the screen
Dark patterns are no accident; they are intentional. A woman in Kerala, desperate for emergency cash, downloaded a lending app that promised “instant, no-documentation loans.” What she got instead were hidden charges, unauthorized deductions, and aggressive collection messages.
These are not isolated incidents. Across India, complaints have surfaced about loan apps sending intimidating notifications (“Your INR 90,000 loan is pending approval”), investment apps nudging users toward certain funds while hiding alternatives, and payment apps burying consent in fine print. MSC’s research and consumer forums echo the same message: dark patterns are multiplying, and ordinary users—especially the elderly, low-income groups, and digitally naïve—bear the cost.
Globally, the scale of manipulation is staggering. More than two-thirds of online services deploy at least one dark pattern. In the UK, unwanted subscriptions triggered by dark patterns cost households nearly GBP 688 million (USD 928 million) annually. In India, the losses are underreported, but given the size of the digital economy, they are undoubtedly significant.
India’s regulatory gaps
India is not blind to the risks. The Reserve Bank of India (RBI) has cracked down on illegal lending apps, and the Ministry of Consumer Affairs has issued guidelines against unfair trade practices. The Digital Personal Data Protection Act, 2023, has begun addressing consent.
Yet major gaps remain. Many dark patterns such as pre-ticked consent boxes, hidden fees, and confusing opt-out mechanisms fall outside the scope of current regulations. A 2021 probe revealed that over half of India’s digital lending apps operated illegally, often without RBI oversight. Enforcement is fragmented, with overlaps across the IT Act, the DPDP Act, and consumer protection rules. Self-regulation, where companies audit themselves, is proving inadequate. The result is a digital ecosystem where manipulation outpaces regulation.
What India needs to do
For regulators, the first priority is to close the enforcement gap. RBI’s oversight must expand beyond lending apps to include payment and investment platforms, with mandatory, independent audits of how disclosures and consent are handled. India also needs national UI/UX standards that establish clear, enforceable design codes so that disclosures, opt-outs, and consent mechanisms are uniform, simple, and transparent. Accountability should not rest on companies marking their own homework. Self-audits must give way to third-party audits and public compliance “trust marks” that offer visible assurance. Just as importantly, financial literacy campaigns must address digital harms. Teaching people to spot manipulative design is as important today as teaching them to calculate interest once was. Finally, policymakers must harmonize laws across the IT Act, the DPDP Act, and consumer protection guidelines so that overlapping jurisdictions do not create loopholes.
For service providers, the responsibility lies in embedding ethics into design. Platforms should follow the equal-click principle—if it takes one click to sign up, it should take just one click to exit. They should conduct regular “sludge audits” using independent checklists to identify and eliminate manipulative designs, with findings disclosed publicly.
Every screen where users make financial decisions should also provide accessible grievance redressal options, ensuring help is always a click away. Beyond this, companies must train product and design teams in digital ethics, moving away from an approach that prioritizes clicks and downloads at any cost.
Consumers, too, have a role to play. They can report suspicious apps and manipulative practices through the RBI’s Sachet portal or the National Consumer Helpline. Before downloading or transacting, users should check platforms such as Consumer VOICE India for independent reviews and share their own experiences to alert peers. Most importantly, they must learn to pause when faced with urgent prompts whether for a loan, investment, or subscription designed to push them into hasty decisions.
For policymakers and development agencies, the task is to give legal recognition to dark patterns by defining and prohibiting them in consumer protection and data privacy statutes. This should be complemented by India-specific design standards multilingual, locally tested, and regularly updated to stay ahead of new manipulation tactics. There is also a need to support innovation that works against manipulation, including AI and machine learning tools that detect dark patterns in real time.
Finally, the tech and design community has the potential to drive cultural change. Co-design workshops with NGOs and consumer groups can test financial platforms for manipulation and feed the evidence back into regulatory reforms. Ethical innovation should be celebrated, with India positioning itself not only as a fintech leader but as a global champion of fair and transparent digital design.
A collective response
Dark patterns thrive in opacity, exploiting gaps in awareness and regulation. Tackling them requires a coalition of regulators, industry, civil society, and consumers. The path is not about slowing down innovation but ensuring it is trustworthy.
If India can combine stronger audits, clear design standards, and empowered users, it can turn its digital ecosystem into one that protects the most vulnerable while sustaining innovation. In doing so, India can set a global benchmark: a digital financial system that is fast, fair, and fundamentally ethical.