Consumers' attitudes to Terms and Conditions (T&Cs)

When was the last time you wanted to purchase something online, but decided not to go through with the purchase because you did not like the seller's terms?

To understand how consumers can get better informed about the content of T&Cs and how their trust in T&Cs can be enhanced, the European Commission has carried out a study that provides fresh insights and recommendations on how consumer readership, comprehension and trust in T&Cs can be improved. The findings are based on data collected through a literature review, online surveys and online behavioural experiments with consumers in 12 EU Member States.

KEY FINDINGS

The study investigated two different ways to help consumers assess the substantive quality of the T&Cs. The first focused on increasing consumer readership and understanding of T&Cs, while the second focused on increasing consumer trust in the sellers and the quality of the T&Cs without necessarily expecting consumers to read the T&Cs.

Effects of efforts to increase readership and understanding

Default exposure to T&Cs seems to increase readership

• When consumers had to scroll through the T&Cs, 77.9% indicated that they read at least part of the T&Cs, while when they had to open a separate link to access the T&Cs only 9.4% of consumers read at least parts of the T&Cs.

Shortening and simplifying T&Cs has many positive effects

• It results in improved readership of T&Cs. For example, when T&Cs were extremely short and simple 26.5% of consumers report to have read the full T&Cs compared to only 10.5% when the T&Cs were long and complex.
• It results in a better understanding of the T&Cs, as shown by an objective comprehension test on the content of the T&Cs, as well as by consumers' self-reporting of how easy or difficult it was to understand the T&Cs.
• It results in more positive attitudes to the T&Cs. Specifically, consumers were more satisfied with the content of the T&Cs, felt less frustrated when reading them, and felt more that reading them was worth their time when the T&Cs were simplified and shortened. Importantly, even though the T&Cs were shortened, consumers indicated that they did not miss relevant information.

Informing the consumer about how long it will take to read the T&Cs increase readership

• When the opening of T&Cs was optional, stating how much time it takes to read the T&Cs increased the proportion of consumers opening the T&Cs from 9.4% to 19.8%.

Effects of adding quality cues on consumers' trust and purchase intentions

The effects vary by type of quality cue

• A promise-to-to-be fair by the seller and an expert endorsement by a consumer law expert were not found to be effective – in fact, sometimes they decrease consumers' trust and purchase intentions.
• A positive customer feedback cue, an endorsement by a national consumer organisation and an endorsement by a European consumer organisation generally increase consumers' trust and purchase intentions.

The trust in the quality cue differs

• Of the cues with positive effects, the customer feedback cue is trusted the least.
• On domestic online stores a national consumer organisation endorsement is trusted the most, while on foreign online stores an endorsement by a European consumer organisation is trusted the most.

HOW WILL THESE FINDINGS BE USED?

The study will inform the ongoing review of EU consumer and marketing law, as it is particularly relevant for the Unfair Contract Terms Directive. It is also relevant for efforts to advance the Digital Single Market, as it points to how consumers' trust in cross-border sellers can be increased.