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“The design is nice -- it’s easy to read. It’s set up nicely, just the whole italic and the bold heading and the lines and so on -- it’s just easy to read. It’s not confusing. You know you don’t have to plow through it.”
“[It’s] good if you were going to compare them. I mean, you can just put this one next to this one, and go: yes, yes, no, no. It’s very symmetrical.”
Effective Disclosure Regimes:
Practical Approaches
Jeanne M. HogarthConsumer & Community Affairs
Federal Reserve Board, USAThe analysis, comments and conclusions set forth
in this presentation represent the work of the authors and do not indicate concurrence of the
Federal Reserve Board, the Federal Reserve Banks, or their staff.
Goals
Discuss: What makes a disclosure effective?
Goals Share: Design project on notices
that are easy understand and compare
Not a strong record of success
Alcohol and tobacco warnings
Not a strong record of success
Consumer product warnings
Not a strong record of success
Too many products
What makes a disclosure effective?
Consumers are exposed to it
What makes a disclosure effective?
Consumers are aware of it (pay attention to it)
What makes a disclosure effective?
Consumers can comprehend it (understand it)
What makes a disclosure effective?
Consumers can remember it when they need it
What makes a disclosure effective?
Consumers can use it (act on it) when making a decision
Some dilemmas
Exposure & attention
Consumers pay attention to noveltyNew! Improved! Different!
Some dilemmas
Learning effects:
consumers are better at comparing when information is standardized
More dilemmasEfficacy of “encouraging” or “fearful”
messages depend on what behavioral stage a consumer is in
More dilemmasEfficacy of “encouraging” or “fearful” messages
depend on what behavioral stage a consumer is in
More dilemmasHow do we know who is where and
what information they need?
Plain language is necessary..
.. But not sufficient
More than just “plain language”
How do you frame the disclosure – what’s the context?
More than just “plain language”
Is the whole equal to the sum of the parts? How do you organize the parts
More than just “plain language”
How do consumers process information?
WIFFM (what’s in it for me?)
APR?Fees?
Monthly payment?
Interagency project – designing easy-to-
understand consumer financial privacy notices
Design notices that are easier for consumers to understand and compare
Our Targets
Comprehension Compliance Neutrality Comparison
Knowledge
Observation and recall of data
Comprehension
Understanding of information
Application
Applying knowledge to a new situation
Analysis
Separates information into part for better understanding
Synthesis
Builds a pattern from diverse elements
Evaluation
Judges the value of informationBloom’s
Taxonomy
Research Questions
Overa
ll R
esearc
h Q
uesti
on
s:
1.
How
well d
o p
art
icip
an
ts u
nd
ers
tan
d t
he fi
nan
cia
l p
rivacy
noti
ce?
2.
Wh
at
ch
an
ges a
re r
eq
uir
ed
to m
ake t
he fi
nan
cia
l p
rivacy
noti
ce m
ore
usab
le?
Research QuestionIs the information provided in this notice clear and conspicuous?
Research QuestionDo participants understand the bigger picture?
Research QuestionDo participants see and understand the differences in sharing practices?
Research Issue #2
Comprehension
Research Issue #1
Context
Research Issue #3
Comparison
Context PurposeContent Differences
Design processPlan
Design
Assess/Revise Test
Evaluate
Consumer testing
Focus groups
Formative testing
Sets of individual interviews
What we learned
Context is key to comprehension
Design elements aid comprehension
Content revisions improved comprehension
Consumers were able to compare
Where do we go from here?
Usability testing with larger sample
Final report by end of 2006
Coming Attraction!
Truth in Lending – Regulation Z Open-end credit (credit cards)