Disclosing Uncertain Outcomes : How Consumers React to Vague Language

Vague language is ubiquitous in financial and legal communication. Vague phrases like “in some cases” and “may or may not” are used to succinctly convey complexity and uncertainty around terms and conditions, but it is unclear what likelihoods these phrases actually convey to consumers. In an experiment conducted on nearly 4,500 U.S. participants, we study how consumers interpret and react to vague phrases in a financial context. Participants responded to eight phrases ranging in vagueness (“will,” “will not,” “may,” “may not,” “may or may not,” “in few cases,” “in some cases,” “in most cases”) that were used to describe events in six real-world disclosure scenarios (e.g., a form describing how likely it is a debt will appear on a credit report; a form in a financial app’s privacy policy describing the likelihood that users’ data will be collected). Our primary measure asked participants to rate the probability of occurrence for events described using these phrases. The results suggest that 1) on average, consumers differentiate between seemingly similar vague phrases, 2) events qualified with phrases used to communicate certainty (e.g., “will”) are often interpreted as uncertain, and 3) vague phrases elicit negative feelings and reduced understanding. Furthermore, these results depended on participants’ reported levels of financial experience, with less experienced consumers reporting greater uncertainty across the range of phrases we tested. We conclude that vague phrases should not be chosen arbitrarily when disclosing information and we discuss the relevance of these findings for policymaking and communicating uncertainty more broadly