In today’s rapidly evolving digital finance ecosystem, Consumer Reports has been at the forefront of evaluating financial apps and services and advocating for better consumer protections. Our Fair Digital Finance evaluation program takes a comprehensive approach, analyzing not just the user experience but also the policies that underpin them. We’re sometimes asked why we focus on policies when we also conduct product testing and consumer research and consistently advocate for companies to go beyond the fine print?
The answer lies in an analogy we often use when we talk to companies: the car manual. Most drivers rarely give their car’s manual a second thought—until they get a flat tire, their engine starts making an unusual noise, or their check engine light goes off. In those critical moments, that often-ignored manual becomes an invaluable resource. Similarly, a financial app’s terms of service, privacy policy, or other seemingly inscrutable fine print might seem irrelevant during day-to-day use, but they become crucial when issues arise.
We’ve long highlighted that many financial service policies are vague, opaque, and often written beyond reasonable reading levels. We’ve pointed out that legal notices and documents are insufficient to effectively inform consumers, and that most users don’t read them at all. This reality underscores the need for companies to create more dynamic, easily digestible information rather than burying important details in the fine print.
However, advocating for more effective communication doesn’t negate the importance of comprehensive, well-crafted policies. These documents serve as a critical baseline, defining the rights and protections afforded to consumers. They’re the foundation upon which consumer trust is built—or broken.
Here’s why policies matter, even when the user experience is great:
- They Define Your Protections: Policies outline what happens if something goes wrong. In case of fraud or errors, these documents determine whether and how you’ll be reimbursed.
- They Explain Data Usage: In an era of data breaches and privacy concerns, policies tell you how your personal and financial information is collected, used, and shared.
- They Set Expectations: Policies clarify what you can and can’t do with the service, helping you avoid unintentional violations that could jeopardize your account.
- They Change: Unlike the stable interface you’re used to, policies can be updated frequently. These changes could significantly affect your rights or the service’s functionality.
- They Reveal Company Values: How a company crafts its policies often reflects its commitment to consumer protection and transparency.
Our evaluation program, therefore, takes a comprehensive approach:
- We assess the clarity, fairness, and comprehensiveness of policies, pushing companies to set high standards in their official documents.
- We advocate for and evaluate how companies communicate these policies to users in more accessible ways, encouraging transparency beyond the fine print.
- We conduct product testing to ensure that companies’ practices align with their stated policies.
- We engage in consumer research to understand how users interact with and understand certain financial products and their associated policies.
This multifaceted approach allows us to push for improvement on all fronts: better underlying policies, more effective communication of those policies, and products that live up to their promises.
We often encounter an intriguing irony in our work. When we engage with companies about their policies, we sometimes learn that they are doing more than what’s stated in their fine print. We are always glad to see this. The law provides a baseline floor of protections and rights beyond which companies are always able to provide more. Some even question why we’re focusing on policies at all, given that consumers rarely read them. The irony isn’t lost on us – the very complexity that makes these policies hard for consumers to engage with is precisely why this scrutiny is so important. Because, when issues arise, some companies often retreat behind the shield of their fine print, citing compliance with legal requirements. This contradiction underscores the importance of our policy reviews. While companies may go beyond their stated policies in practice, those policies remain the baseline for consumer rights and protections. By scrutinizing these documents, we can push for higher standards in the official policies, ensuring that when companies do fall back on their fine print, consumers are still afforded robust protections.
Our recent blog post on peer-to-peer (P2P) payment services’ policies is a case in point. The blog post describes our review of scam and fraud protection policies, which found little improvement since our last evaluation in 2022. While this evaluation didn’t include product testing or consumer research, it remains a valid and crucial part of our overall assessment. By analyzing how these policies have – or haven’t – evolved since our 2022 assessment, we gain valuable insights into the state of consumer protection in the digital finance landscape.
This policy review, combined with our ongoing product testing and consumer research, forms a comprehensive picture of the digital finance ecosystem. It allows us to identify discrepancies between stated policies and actual practices, push for meaningful improvements, and ultimately empower consumers to make informed decisions about the financial services they use.
In the ever-evolving world of digital finance, policies may seem like an afterthought to many users. But at Consumer Reports, we recognize them as the foundation of consumer rights and protections. By shining a light on these often-overlooked documents, we’re working to ensure that when consumers need that metaphorical ‘manual’, it’s not only there but also clear, fair, and comprehensive.
