Exploding the Fine Print: Designing More Effective Legal Disclosures

The government uses mandated disclosure as a central way to regulate companies’ relationships with consumers. The government sets standards for how companies present terms, conditions, and other legal information to people, in the hope that communicating these terms will educate people sufficiently to make wise decisions. But are these disclosures actually comprehensible, engaging, or effective? Anecdotally, we all know that most people ignore the fine print, click through online disclosures without reading them, and trash the paperwork that come along with products or account statements.

This practicum experiments with how these very important disclosures could be improved through designs that could make the information more understandable, more engaging, and more actionable for normal people.

The practicum partners with the financial regulator FINRA, which is grappling with a specific disclosure use case: when financial companies advertise their products to people via print, web, mobile, and television, how can they effectively communicate the terms and risks of these financial products? What kind of disclosure design — with more visuals, with more interactivity, or with tech-enabled communication — could be a new standard for helping people make smart decisions about financial products?

The Practicum team will work with FINRA leaders to understand their current disclosure design requirements for financial companies and their rule-making process as they set new regulations for advertising disclosures. We will understand the needs and requirements of the regulators, the financial companies, and the different target users, and then use the design process to generate new proposed models for disclosures and then test them with qualitative and quantitative evaluation. We will submit this research and these new models to FINRA to be used as they define standards for securities firms communicating with the general public.

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