India’s insurance regulator has stepped in to tackle a growing problem for policy buyers: misleading app designs that push users into decisions they didn’t intend to make.
The Insurance Regulatory and Development Authority of India (IRDAI) has directed all insurers and aggregators to identify and eliminate “dark patterns” within 15 days, following a nationwide survey by LocalCircles that found over 8 in 10 consumers faced such practices while buying insurance online.
Over the last 36 months, LocalCircles has done extensive work in researching dark patterns basis consumer inputs, AI based simulation and validation and escalated the same to various regulators in India.
Dark Patterns are practices that mislead consumers to taking certain actions that they did not intend to take. Post LocalCircles escalation various regulators have mandated resolution of dark patterns including the Central Consumer Protection Authority (CCPA) which has identified 13 dark patterns and classified as unfair trade practices.
Previously, post LocalCircles escalation, the Reserve Bank of India (RBI) issued a draft notification “Responsible Business Conduct Amendment Directions, 2026” mandating that by July 2026 all banks must ensure that their online banking apps and platforms are free of dark patterns. Now IRDAI has become the second regulator to act against use of dark patterns.
IRDAI has asked insurance companies to ensure that their user interfaces, that manipulate consumers, on their digital platforms comply with the CCPA guidelines within 15 days and that they should submit action plans for removal within one month.
Key Survey Findings: Dark patterns pervasive and rising
The LocalCircles study, which received over 87,000 responses from consumers across 341 districts, highlights the scale and severity of the issue.
1. Subscription Trap (80%)
80% of users reported difficulty cancelling policies after purchase. The incidence increased sharply from 61% to 80% in 24 months
2. Nagging & Spam Push (90%)
90% of users experienced persistent calls, SMS, or emails. This continued even after cancellation attempts.
3. Forced Action (85%)
85% of users reported being forced to share excessive personal data. The instances of unsolicited communication and data misuse rose from 57% to 85%.
4. Bait & Switch (82%)
82% of users experienced discrepancies between advertised and actual pricing/terms.
5. Hidden Charges / Drip Pricing (65%)
65% of users reported undisclosed charges revealed late in the purchase journey.
Impact on consumers: Financial harm and trust erosion
The survey highlights that the widespread use of dark patterns has led to:
• Difficult cancellations and forced renewals
• Financial losses due to hidden charges and misleading pricing
• Unwanted communication and privacy violations
• Policies being sold without full understanding or consent
What are “dark patterns”?
Dark patterns are design tricks used on apps and websites to nudge users into actions they may not fully understand or intend.
In insurance, this often shows up as:
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Making it hard to cancel auto-renewals -
Showing low prices upfront, then adding hidden costs -
Bombarding users with calls, emails or notifications -
Forcing users to share more personal data than necessary
For many users, this leads to buying policies without full clarity—or staying locked into plans they didn’t want.
What IRDAI has ordered
The regulator has now made it clear that this must stop.
Insurance companies and platforms have been asked to:
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Conduct a self-assessment within 15 days -
Submit a compliance report to IRDAI -
Provide a time-bound plan within one month to remove such practices
The directive also requires platforms to align with guidelines issued by the Central Consumer Protection Authority (CCPA), which classifies dark patterns as unfair trade practices.
Why this matters for you
If you’ve ever:
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Struggled to cancel an insurance policy -
Felt pressured by repeated calls or notifications -
Noticed final prices higher than what was advertised
The IRDAI action marks a turning point in addressing digital mis-selling in insurance, but sustained oversight will be critical to ensure compliance. Given that 60% to 90% of consumers continue to face dark patterns across different categories, LocalCircles urges regulators to establish a continuous monitoring framework; mandate third-party audits; enable consumer reporting mechanisms and take swift enforcement action against violators.
“IRDAI’s directive requiring compliance within 15 days is a strong and timely response to consumer feedback. Going forward, robust audits, transparent disclosures, and strict enforcement by IRDAI and CCPA will be essential to eliminate mis-selling and restore trust in India’s insurance sector,” said Sachin Taparia, founder of LocalCircles.
