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Consumer protection in the financial market has several dimensions. From a formal point of view, consumer rights are guaranteed by law. Educational programs are implemented in schools and the media to promote knowledge and responsible use of financial products and services. Despite the efforts made, the number of incorrect and suboptimal financial decisions is so high that the risk of households falling into excessive debt remains significant. The limited effectiveness of the law led to the claim that only effective education can reduce the risk of suboptimal financial decisions. Unfortunately, the efforts made in this area are not fully satisfactory. The study of financial knowledge of consumers, which was conducted in Poland in January 2024, aimed to verify consumer errors and their nature. As part of the consumer study, not only declared knowledge was verified, but also actual knowledge. The researchers' doubts resulted from a comparison of the results of scientific research in this area with the current market situation. Consumers declare a high level of knowledge of economic and financial concepts. In practice, however, they make mistakes that do not only indicate behavioral cognitive errors but also a lack of knowledge. The test questions were constructed in such a way as to verify the declared knowledge (based on verification questions). These showed that the actual level of knowledge was lower than the declared one. A review of the literature and studies of financial knowledge and financial competence of consumers in Central European countries was also carried out. Analysis of the results allowed for the formulation of conclusions regarding the educational gap in relation to social characteristics. The conclusions resulting from the study raise questions about the effectiveness of the educational methods used and indicate possible directions of changes in the consumer regulation policy, the aim of which is to ensure a high level of consumer protection. [ABSTRACT FROM AUTHOR]

Sixteen jurisdictions in the United States prohibit payday lending through stringent usury laws or well‐established nonprofitable 36% interest rate caps. Yet over one in 10 consumers residing in these jurisdictions borrowed payday loans in the past 5 years. This raises questions about actual policy implementation and enforcement. We employ data from the 2018 National Financial Capability Study to investigate if associations between payday lending prohibitions and payday borrowing differ by degree of enforcement. We find that nuances in degree of enforcement among restrictive states are not associated with payday borrowing likelihoods. However, these nuances appear when examining payday borrowing frequency, particularly when controlling for consumers' financial circumstances and when conditioning on alternative financial services consumers. We consistently note the highest borrowing behaviors for states sans regulation. Policymakers may consider strengthening enforcement in cases where the primary goal is preventing or reducing payday borrowing. [ABSTRACT FROM AUTHOR]

This paper investigates the growth of new forms of personal finance used in purchasing motor vehicles – a development which it characterises as 'financialisation'. It focusses on the case of the rise of the personal contract purchase (PCP) in the United Kingdom market, and seeks to account for its growing popularity, and potential implications. It is found that the rise of PCPs is best understood as a form of financial innovation designed to help car manufacturers overcome long-term profit realisation problems produced by market saturation in mature markets. The way PCPs are structured lowers consumers' monthly finance payments, allowing them to access to higher value vehicles, and encourages more frequent purchases of new vehicles, all of which allows greater manufacturer profit realisation. However, it does so in a way which increases financial risk, to consumers, car manufacturers, and financial investors. On the other hand, manufacturers' risk exposure is limited by how the consumers' car dependency lowers expected default rates. PCPs threaten financial stability, as well as sustaining social and environmentally unsustainable consumption practices. [ABSTRACT FROM AUTHOR]

Research background: People who take non-banking loans are primarily perceived as excluded from accessing bank services. The growth of e-commerce and the increasing digitalisation of customer interactions with banks was particularly accelerated by the COVID-19 pandemic (the first 'black swan'). These processes have also influenced the rapid growth of the LendTech (LT) sector within FinTech with its digital loans and buy-now-pay-later (BNPL) services. The war in Ukraine (the second 'black swan') has led to an energy crisis, increased inflation, interest rates and credit costs, and reduced credit accessibility. In this context, the following research questions are addressed: Are the LT and banking sectors complementary or substitutive in the area of consumer financing? Does complementarity apply to all customer segments and loan amounts? How does the extent of complementarity or substitutability of the LT sector depend on, and to what extent do changes in the regulatory and macroeconomic environment affect, the interaction between the banking and LT sectors? Purpose of the article: The aim of the article is to identify trends in the LT sector within FinTech in the context of assessing the scale and determinants of current and future complementarity of the non-bank sector and the banking sector in the area of consumer credit in time of black swans. An additional purpose of the article is to estimate revenues from the basic operating activities of companies from the on-line channel. Methods: The research process was multi-stage and the research procedure was structured. Due to the lack of a uniform source of data on LT products and services, the study used many data sources -- data from the Credit Information Bureau, a primary nationwide survey on LT users a primary survey of people representing LT's managerial staff. The selection of LTs was carried out according to the concept of the monetary sampling unit. The Horvitz-Thompson estimator with Sen-Yates-Grundy variance form was used to estimate net operating income for LT from the online channel in 2021. Findings & value added: The LT companies surveyed state that black swans (the COVID-19 pandemic and the war in Ukraine) and the current macroeconomic situation have not significantly affected demand for non-banking loans. The reduction in the opportunities for the LT sector as a result of anti-usury regulations will only lead to a shift in consumer demand to the pawnshop sector and the shadow economy, which will be detrimental to consumers. Complementarity between LT and the banking sector is revealed especially in crisis situations, thus limiting the effects of market shock (limited supply of loans offered by banks). In periods of stabilisation, a rather clear division of preferences is noticeable - in the case of seniors and loans for higher amounts, banks dominate, while in the case of lower amounts and in younger age groups, non-bank institutions are more popular. The mechanism by which shrinking banking services are replaced by LT in short-term crises confirms the importance of LT in balancing the Consumer Finance market in the face of unstable periods. From a medium- and long-term perspective, it should be noted that inflation and rising interest rates will increase the scale of credit exclusion in commercial banks, shifting part of the demand to the non-bank sector. These phenomena have an international dimension. Similar observations were made already in 2012 by the CFPB in the USA and the British FTA, when analysing the consumer finance market immediately after the subprime crisis, emphasising the effects of limiting access to bank consumer loans and the resulting growth of the LT market (Gębski, 2013). [ABSTRACT FROM AUTHOR]

As an essential psychological construct, financial self‐efficacy (FSE) has garnered considerable attention in the field of consumer finance and demonstrated its influence on financial outcomes. FSE has been regarded as a learned belief rather than an innate quality that can be nurtured over time. Notwithstanding the increasing significance of understanding consumers' FSE, this particular line of literature has not been examined as an independent research domain. Accordingly, this framework‐based review comprehensively represents the current state of literature on FSE by covering 64 articles published between 1999 and 2023, compiled based on the Scientific Procedures and Rationales for Systematic Literature Reviews protocol and the theory–context–characteristics–methodology framework. Based on the review findings, an integrated model of FSE is proposed, summarizing the study frameworks and constructs employed as antecedents, modifiers, and outcomes in investigating consumer's FSE. Further, the review has identified certain areas that were previously overlooked. As a result, a research agenda has been developed, consisting of 22 research questions and four research objectives, which will articulate the direction for future research. Finally, the paper concludes, signifying the contribution and practical implications for researchers, families, practitioners, and society in selecting the most effective measures for improving consumers' FSE. [ABSTRACT FROM AUTHOR]

Payment frequency is a fundamental yet underexplored feature of consumers' finances. As higher payment frequencies are becoming more prevalent, consumers are receiving more frequent yet smaller paychecks. An analysis of income and expenditure data of over 30,000 consumers from a financial services provider demonstrates a naturally occurring relationship between higher payment frequencies and increased spending. A series of lab studies support this finding, providing causal evidence that higher (vs. lower) payment frequencies increase spending. The effect of payment frequency on spending is driven by changes in consumers' subjective wealth perceptions. Specifically, higher payment frequencies reduce consumers' uncertainty in predicting whether they will have enough resources throughout a period, increasing their subjective wealth perceptions. As such, situational factors that reduce prediction uncertainty for those paid less frequently (e.g. the timing of consumers' expenses, income levels) moderate the impact of payment frequency. The effects of payment frequency on subjective wealth and spending can occur even when objective wealth favors those with lower payment frequencies. More broadly, the current work underscores a need to understand how timing variations in consumers' income impact their perceptions, behaviors, and general well-being. [ABSTRACT FROM AUTHOR]

This study used financial socialization theory to examine the direct and indirect association between financial socialization (from parents, peers, and teachers) and financial well-being (FWB) via financial self-efficacy (FSE). Data were collected from Pakistan in early 2020. Our data analysis using the partial least square structural equation modeling approach revealed surprising results. We found that an association between financial socialization from peers and FWB does not exist both directly and indirectly via FSE. Furthermore, the results showed that the association of financial socialization from parents and teachers with FWB is completely mediated by FSE. Other results indicated partial mediation of FSE in the association between early childhood consumer experience and FWB. Our findings imply that learning from others' financial experiences builds young consumers' confidence in dealing with financial matters, which, in turn, helps improve their FWB. We suggest policymakers to consider these findings in designing policies related to the young consumers of developing nations. [ABSTRACT FROM AUTHOR]

The authors analyze the consumer finance markets in the countries of Central and Eastern Europe against the background of the markets of the EU countries and the Euro area, with particular emphasis on non-bank lending institutions that use financial technologies to grant loans to consumers. As research shows, these loans are more expensive than traditional consumer bank loans, but more accessible, more flexible and tailored to the needs of customers from different generations. Black swans - sudden, unpredictable events - do not, in principle, change the demand for consumer credit but merely slow the growth dynamics of the market, which returns to its pre-disruption level after some time. [ABSTRACT FROM AUTHOR]

Financial coaching, a hands-on financial wellness approach, has emerged as a go-to strategy to help clients establish and reach their personal financial goals. We analyzed the borrowing and repayment behavior of 1,790 clients who received financial coaching through a program sponsored by the state of Delaware. Relative to a matched comparison group, financial coaching clients cure 0.24 more delinquent accounts, reduce credit card utilization by 5 percentage points, reduce the number of debts in collections by an additional 0.37 accounts, and have $422 less in credit card debt. Findings also show a 7 percentage point increase in the share of clients with a credit card and a 6 percentage point increase in the share of clients with a student loan. We do not see consistent differences in personal installment loans or mortgage holding. These estimates provide evidence that financial coaching can provide benefits for clients while being provided on a state-wide scale, illustrating the potential of public–private programs to provide services. [ABSTRACT FROM AUTHOR]

The emergence of BigTech companies in the financial services sector has raised concerns about their potential to disrupt traditional banking and establish their own financial institutions. This research investigates the extent of BigTechs' activities in payments and finance and explores their intentions in disrupting the banking sector. The study adopts a qualitative methodology to critically analyse market reports and credible market intelligence websites and official websites of news agencies. The findings reveal that BigTechs' activities are selective and aimed at supporting their core businesses in commerce, technology, advertising, and social media, rather than disrupting banking. However, their involvement in Buy Now Pay Later (BNPL) financing poses a challenge to retail banks, prompting Islamic banks to establish their own BNPL facilities. Procedural complexities related to Sharīʿah compliant structuring can be addressed using financial technologies like smart contracts and payment gateways. Islamic banks could also collaborate with FinTechs to create frequently used Muslim lifestyle apps or super apps that offer embedded finance for the ḥalāl economy. The study concludes that Islamic banks should consider these opportunities to meet the younger customers' mobile shopping and social media communication habits.

Bridging the gap between theory and practice, this study yielded a reliable and valid measure for responsible financial behaviors with the potential to serve practitioners when working with consumers. This research utilized Bandura's Triadic Model of Causation (Bandura, 1985) to investigate and predict responsible financial behaviors. Data from the 2009, 2012, and 2018 National Financial Capability Study surveys were used to construct a responsible financial behaviors index with five subconstructs for time horizon, money management, risk management, debt awareness, and ownership of baseline financial accounts. Results from a series of regression models identified consistent relationships between the index and variables categorized as cognitive factors (financial knowledge, financial self-efficacy, and financial risk tolerance) and background characteristics (educational attainment, income, and marital status). [ABSTRACT FROM AUTHOR]

Analyses done using the survey response of 451 credit cardholders in the northern region of West Malaysia have shown that credit cardholder repayment pattern differed based on their demographic profile. Specifically, the study found that credit cardholders who were younger and earned a lower income tended to make poorer repayment decisions. In contrast, those with higher academic qualifications tended to make better repayment decisions. Further analyses also revealed that behavioral biases were better at predicting those who made full payment of the outstanding balance and those who paid more than the minimum amount, but failed to predict those who only paid the minimum amount or less. In addition, it was found that overspending emerged as the strongest predictor which discriminated among the three repayment groups, followed by risk aversion, myopia and impulsiveness. [ABSTRACT FROM AUTHOR]

This study was conducted to investigate the effect of learner characteristics on online interaction, the relationship between online interaction and learner satisfaction, and variances in online interaction across different courses. Three types of online interaction were studied: learner-instructor interaction, learner-learner interaction, and learner-content interaction. To achieve the goals of this study, a survey was sent out to students enrolled in three online consumer finance courses at a large research university. Findings reveal that females rated the instructor-student interaction higher than males. Studentcontent interaction correlated the most with learner satisfaction. Learner-instructor and learner-learner interaction varied significantly among the three courses, while no statistical difference was found in learner-content interaction across the courses. This study provides insights for instructors, instructional designers, and administrators to implement and improve their design of different types of interaction in online course to enhance learner satisfaction and the quality of online courses. [ABSTRACT FROM AUTHOR]

Analyses done using the survey response of 451 credit cardholders in the northern region of West Malaysia have shown that credit cardholder repayment pattern differed based on their demographic profile. Specifically, the study found that credit cardholders who were younger and earned a lower income tended to make poorer repayment decisions. In contrast, those with higher academic qualifications tended to make better repayment decisions. Further analyses also revealed that behavioral biases were better at predicting those who made full payment of the outstanding balance and those who paid more than the minimum amount, but failed to predict those who only paid the minimum amount or less. In addition, it was found that overspending emerged as the strongest predictor which discriminated among the three repayment groups, followed by risk aversion, myopia and impulsiveness.

This research discusses how the law protects business actors from consumers who do not have good faith in carrying out their obligations in paying installments. So, this study aims to analyze, prove, and find value on the principle of default committed by consumers in cases between PT. SINARMAS MULTIFINANCE MEDAN BRANCH with its debtors in decision No. 688/Pdt.Sus-Bpsk/2018/PN Medan. Based on the objectives to be achieved, this study uses a normative juridical method using references from various books, journals, legislation, and other supporting literacy. The results of this study reveal that the agreement given by the consumer finance party regarding the rights and obligations imposed on the debtor is to pay instalments, if this obligation is not fulfilled then a subpoena can be given. If it is not fulfilled, then the goods that are used as objects can be withdrawn, as a result the debtor can lose the right to the goods, and the consumer finance party can terminate the agreement unilaterally. Finally, this study concludes that there has been an act of default by the debtor to the creditor. Furthermore, he found that the form of protection for consumer finance for motorized vehicles for consumer default, namely the agreement of substitution power for unit acquisition and the sale of fiduciary guarantees.

I quantify the impact of Federal Funds Rate (FFR) movements on consumers’ welfare via the floating, or variable, rate on their credit cards. I first newly document that 96% of card rates adjust to the FFR within 3 months of a change in the latter. Exploiting these rate changes, I construct a model of card use and estimate it using a national database of U.S. card accounts. Model estimates imply that a hypothetical 25 bp rise in the FFR lowers annual consumers’ surplus by 0.23% of personal consumption expenditures ($31.97 billion), and disproportionately more so in lower income areas. [ABSTRACT FROM AUTHOR]

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Using a unique setting of an online peer-to-peer lender, I show that banks expand credit access for consumers who obtain FinTech loans. Consistent with FinTech relieving information frictions, this effect is stronger for more credit-constrained consumers. Many borrowers, especially higher-quality ones, use peer-to-peer loans to repay expensive revolving debt. Yet, debt financing and credit score changes cannot fully explain higher bank credit. The increase in bank credit access is stronger when information sets between banks and peer-to-peer lenders diverge more. These results highlight information spillovers as a novel mechanism through which FinTech lending can relieve financial constraints for consumers. This paper was accepted by Tomasz Piskorski, finance. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.4319. [ABSTRACT FROM AUTHOR]

Although budgeting is widely considered a common method of managing household finances, surprisingly little is known about the budgeting process. Using a nationally-representative survey (N=3,826) of US adults, we examine budgeting behaviors and beliefs, including who budgets and why, how individuals categorize consumption, and how they adjust their behavior after over- or under-spending. We identify five facts that illuminate key features of budgeting and supplement findings with administrative data (N=194,678) from a large financial institution in Australia. Understanding systematic patterns in how individuals and households budget can serve a critical role in informing economic models of consumption-savings behavior. [ABSTRACT FROM AUTHOR]

This research explores how consumers plan for their personal finances, focusing on the simultaneous effects of spending and saving needs in budget-setting. The current research proposes that the number of budget categories and salient savings goals interactively influence consumers' budget estimation. In two lab studies, we showed that participants with a salient savings goal tend to experience conflicts when they have the same (vs. different) number of budget categories for spending and saving needs, thereby perceiving the increased savings goal importance, which leads to the increased money allocation to saving. Our results further suggest that a detailed financial plan may not always help consumers to pursue financial success. This research contributes to the body of work on budgeting and consumer finance. We conclude by discussing the theoretical and practical implications of our findings. [ABSTRACT FROM AUTHOR]

This paper studies changes in the worldwide payment system by examining the growing popularity of buy now, pay later (BNPL). Considering variables related to individual financial personality and socio-demographic traits, we provide an original dataset to investigate whether BNPL could be a valid substitute for the use of payment cards. The results show that the payment card sector should take BNPL seriously as a competitive challenge. The developments of the COVID-19 pandemic suggest a possible change from the usage of payment cards towards BNPL, similar to what happened with cash transactions. This research contributes to the literature on the topic by proposing fresh ideas for payment methods and the financial sector, which continue to evolve in response to consumer needs. • Competitive Threat : BNPL poses a significant competitive threat to the traditional payment card industry. • Consumer Flexibility : BNPL offers consumers the flexibility to make immediate purchases, making it an attractive alternative. • Regulatory Challenges: There is a need for regulatory measures to mitigate the financial risks, particularly for consumers with lower financial literacy. [ABSTRACT FROM AUTHOR]

This article explores when consumers avoid learning information about their credit scores and how viewing one's credit score impacts future credit scores. This paper explores the impact of information avoidance in the context of consumer finance. Specifically, under what circumstances do individuals avoid information about their credit, and how does avoiding this information affect their future credit scores? Using data from a consumer finance platform, we find that a decline in credit score decreases the likelihood that an individual views her credit report in the future. We then measure the impact of receiving information on future credit scores, especially for those likely to avoid information. To obtain a causal local average treatment effect, we use variation in whether an individual views her credit report induced by email campaign A/B tests on a subsample of users who do not opt out of email communication. We find heterogeneous effects of information on credit scores. For individuals who were more likely to avoid information (users whose credit scores were decreasing), viewing their credit reports further decreases credit scores, whereas information increases credit scores for individuals less likely to avoid information. This finding suggests that encouraging individuals to access information when they are more likely to avoid information may worsen their financial health. We discuss the implications for firms' targeting strategies in retention efforts. [ABSTRACT FROM AUTHOR]

• Home ownership acts as a moderating factor in the relationship between financial knowledge and financial behaviour of adult citizens. • Home ownership explains the financial behaviour of homeowners. • Financial knowledge has greater potential to improve the financial behaviour of renters. The relationship between financial knowledge and financial behaviour has been widely studied in previous literature. Numerous works conducted in different contexts have found a positive relationship between them. The objective of this paper is to test the effect of homeownership on this relationship. To this aim, we perform extended ordered probit regressions. We use data from the Survey of Financial Competences conducted by the supervisor of the Spanish securities markets and the Spanish central bank. The results show evidence that supports the hypothesis that home ownership has a moderating effect on the relationship between financial knowledge and financial behaviour. [ABSTRACT FROM AUTHOR]

• The developmental consumption is growing faster than the total consumption. • Household consumption credit significantly promote developmental consumption. • The above effect is more evident for non-farm households. • Investing in stocks has a limited effect on raising household income. This paper selects the China Household Finance Survey (CHFS) for 2017, 2019, and 2021. It examines the differences in the effects of consumer finance play between rural and urban areas using the final screened 9,875 households as the research sample. It is found that household savings, insurance, and stock assets are positively related to household consumption expenditure and consumption structure upgrading; household consumption credit can promote developmental consumption expenditure, and the promotion effect of consumer finance factors is more evident for non-farm households. [ABSTRACT FROM AUTHOR]