The Centre on Wednesday asked parents to exercise caution for making online transactions with ed-tech companies and advised against using the automatic debit option for paying subscription fees.

The advisory comes in the wake of the Department of School Education and Literacy having received complaints that some ed-tech companies were “luring” parents in the garb of offering free services and getting Electronic Fund Transfer mandate signed or activating the auto-debit feature. “Vulnerable families” come in as prime target.

‘Free-premium’ model

“Some ed-tech companies may offer the free-premium business model where a lot of their services might seem to be free at first glance, but to gain continuous learning access, students have to opt for a paid subscription. Activation of auto-debit may result in a child accessing the paid features without realising that he/she is no longer accessing the free services offered by the ed-tech company,” the advisory said.

Parents have been asked not to “register” their credit or debit cards; put an upper limit on transactions; and not share personal details including videos of children. Other suggestions include activating parental controls, doing background research on these companies, going through online reviews (about the service and course content) among others.

Ed-tech boom

Indian ed-tech has seen a boom over the last few quarters, particularly post Covid-19. With schools, colleges and educational institutions remaining shut, there have been many ed-tech companies that started offering courses, tutorials, coaching for competitive exams, etc via online.

A joint report by BARC India and Nielsen stated there was a 30 per cent increase in screen time on education applications on smartphones since the lockdown.

Fund flows in

Corporate law firm, Cyril Amarchand Mangaldas, in May 2021 blog wrote that as per reports, this sector received approximately $2.22 billion in funding in 2020 compared to $553 million in 2019. Out of the total funding, kindergarten to 12th grade received the highest funding of $19.8 billion. Ed-tech majors that include BYJU’s and Unacademy accounted for about 73 per cent of the total funding.

The advisory also tells parents not to “blindly trust” advertisement of ed-tech companies or sign-up for loans, that they are not aware of. Advisory has also been issued against random installation of ed-tech mobile applications.