Are Consumers Vulnerable to Consumer Financial Services? An Exploration of Psychological Antecedents of Attitudes and Behaviors in the Consumer Financial Services Industry: An Abstract

Founded in 2010, the Consumer Financial Protection Bureau (CFPB) aims to protect vulnerable consumers from businesses such as payday lenders, car title lenders, subprime mortgage lenders, and other consumer financial services (CFS), whose core target market shows demographic characteristics of lower incomes and lower levels of education. While supporters of this bureau believe that these consumers are more vulnerable than other groups (c.f., Chatterjee et al. 2009), other researchers argue that these consumers are wise about their financial situation and do not need such government regulation (c.f., Cole 2007, 2015). Demographic characteristics of CFS users are well established, but psychological characteristics and attitudes of this group are not. Thus, this research seeks to examine the impact of gullibility, self-control, interpersonal influence, cognition, and the ability to judge value on attitudes and behaviors of CFS users. A combination of existing Likert-type scales and newly created items was used to measure the constructs in the model. A survey was administered through Survey Sampling International, and online consumer panel/surveying company. A total of 510 usable surveys were collected. Respondents matched the US population with respect to gender and ethnicity, and we requested that respondents earn less than $100,000 per year. Cronbach’s alpha values ranged from 0.79 to 0.95, indicating evidence of measure reliability. Both exploratory and confirmatory factor analyses were performed and provided evidence of convergent and discriminant validity. Structural equation modeling was used to measure the impact of the independent variables listed above on attitudes towards CFS. Gullibility and susceptibility to interpersonal influence appear to be strong, significant predictors of attitudes towards CFS. It was found that the more gullible the respondent, attitudes towards CFS were more positive. Similarly, those who were more susceptible to interpersonal influence also displayed more positive attitudes towards CFS. There was also a link between cognition and attitude; however, this path was only marginally significant. Self-control and the ability to judge value were not significant predictors of attitude.