Are your contract terms easy to read – and are consumers bothering to read them anyway?

About this article

What are we talking about here? Ofcom recently carried out a study to see if consumers were reading terms and conditions and if not, what organisations could do to improve engagement.  This followed another study it carried out last year to review how readable the user policies of video sharing platforms were. 

In this article, we look at the key learnings from the two studies and what you can do to improve engagement with your terms. 

Why does it matter? If consumers read and understand your terms and conditions, they are more likely to comply with them.  In addition, they are potentially less likely to complain about goods and services if they understand their rights and obligations. As well as this, terms have to be transparent and prominent under the Consumer Rights Act 2015 and other consumer law legislation, and regulators will have new enforcement powers under the Digital Markets, Competition and Consumers Act 2024 once it comes into effect.  So it’s generally a good idea all round to have clear terms which are easy to understand.

Need more background? Terms and conditions are the contract between service providers and their users that (should):

• set out the rules for using a product or service and the consequences of breaking those rules,
• provide clarity to consumers on what they can expect when using a product, which means that they can make informed choices about the services available, and
• cover other important areas relevant to the service provider.  Take online safety provisions, for example - user reporting, appeals and content moderation can only work in practice if clear rules for what is and is not allowed are set out in the T&Cs. 

What are the takeaways? Some of the highlights of Ofcom’s findings after reviewing various terms and conditions of video sharing platforms were:

• users need advanced reading skills to understand VSPs’ T&Cs. This means they are not suitable for many users – especially children,
• VSPs’ terms aren’t clear about when they make exceptions to their rules,
• users are unlikely to understand the consequences and potential penalties for breaking VSPs’ rules, and 
• although some VSPs have innovative approaches to updating and testing their guidance for moderators and T&Cs, others could do more to make sure their processes are proactive and forward-looking.

Study #2: Social media terms and conditions

What are the takeaways? Ofcom also carried out research on social media terms and conditions to better understand the user relationship with them, and in particular Community Guidelines. It tested behavioural techniques to first encourage users to engage with T&Cs, and then measured how this impacted a user’s subsequent behaviour and interactions with content. It found that:

• prompting was the only effective way to encourage users to click to read the Community Guidelines. Overall, participants who viewed a prompt were significantly more likely to click on the Community Guidelines than those who only saw a message at sign-up, and

• prompts also increased user recall of the platform rules, but users didn’t better comprehend those rules. This could be due to users not reading the information initially or quickly forgetting it, but does suggest that further strategies may be necessary to ensure a deeper understanding and adherence to T&Cs.

What are the actions? It can be useful to encourage users to engage with T&Cs documents at different times, and not just at sign-up. However, even after prompting, many users still choose not to access the documents. This suggests that service providers also need to focus on the context of how and when prompts are delivered, for them to be effective. 

How can you improve your terms? Using the following techniques can help to improve your terms:

• make sure users can easily find and access them on your website/platform,
• apply plain language principles so they can be understood by as many users as possible, including children and people who don’t have advanced reading skills,
• explore techniques to measure and improve user engagement and comprehension,
• explain key or complex terminology and illustrate them with examples,
• clearly list all potential actions that could be taken against a user if they break the rules,
• review your T&Cs proactively and regularly and create a process to easily update them based on feedback and experience of dealing with customers,
• communicate changes to T&Cs to relevant teams in a timely manner, and
• continue to routinely test the effectiveness of your T&Cs.

Need some help? If you’re not sure where to start with this list, we offer a legal design service for consumer, employment and commercial contracts.  Contact us if you’d like to find out more.