Consumer debt in Australia: why banks will not turn their backs on profit

Five years into the 21st century and consumer debt levels in Australia are still escalating. Simultaneously, there is concern that an increasing number of consumers may be unable to meet their future financial commitments and also mounting alarm at the relative ease with which the majority of consumers can access additional credit facilities. At the same time, credit providers are avidly seeking greater profits by enticing consumers to borrow more and more. Against this background, the issue of corporate social responsibility (CSR) in the Australian consumer credit industry is discussed. The application of strategic stakeholder management theory to the activities of a specific class of lender – banks – is then discussed. The aim is to better understand why the contemporary demands of CSR will not lead banks to undertake a more vigilant approach to consumer lending advocated by consumer groups who, witnessing the impact of the growing level of consumer indebtedness on a number of consumers, are calling for more responsible lending practices. The opportunity to contribute to debate aimed at alleviating the risk of growing consumer indebtedness is highlighted. The paper concludes with an acknowledgement that, without intervention, factors such as competition in the free market for consumer credit, the demands of shareholders for profits, and consumers’ own folly in demanding immediate gratification and readily accepting additional credit as a means of financing their consumption, ensure that consumer debt levels will continue to rise.     

Consumer Support Networks: assessment of need for consumer information and advice service

Research evidence suggests that UK consumers are facing significant problems with goods and services and are in need of information and advice to avoid or redress such situations. Consumers are not always aware of their rights nor where they can access consumer advice services. In 2000, the Department of Trade and Industry launched the Consumer Support Network (CSN) programme in Great Britain to improve consumer access to expert, accurate and timely advice. One challenge faced by these Networks and many other agencies is to assess the needs of consumers for consumer information and advice services. A needs assessment is required as a key element in the effective planning and development of services in each Network at a local level. The focus of the needs assessment at the local level is to encourage Networks to consider suitable solutions to meet the needs of people in their communities. This paper provides a review of the development of Consumer Support Networks in Great Britain and discusses the importance of needs assessment to service providers such as CSNs and other agencies. It reveals the complexity associated with conducting effective needs assessments including the various aspects of needs, consumer segmentation and characteristics of consumer information and advice. Further research is being carried out at Queen Margaret University College, UK, with a view to the development of a scientific model for the assessment of need for consumer information and advice services.     

Investigating the need for consumer education among Turkish secondary school students

This study has been planned to determine the need for consumer education by secondary school students. A total of 300 secondary school students (150 female, 150 male) living in central Ankara in different regions with respect to socio‐economic status participated in the study. Consumer education is defined as the management of economic resources, consumer behaviour concepts, relating to consumption, level of knowledge about consumer rights and responsibilities and environmental sensitivity. On the basis of this study, almost half the adolescents draw up a budget plan and carry out market research before shopping. Also, almost half of them put quality first when choosing goods and cost is of secondary importance. More than half of the students save money for unexpected outlay. Nonetheless, adolescents do not know about consumer rights and responsibilities, nor do they have sufficient information about consumer law and the concept of protecting the environment. More than half of the students stated that they need consumer education courses as part of their curriculum.     

Keeping Up With the Joneses: Analyzing the Effect of Income Inequality on Consumer Borrowing

Household debt relative to disposable income increased from 60% in 1980 to 104% at the end of 2003. ‘Buying on credit’ has become so popular that an increasing number of firms generate more profit from financing than from selling their products. In this paper, we show that rising income inequality has substantially contributed to increased consumer borrowing. Income inequality affects all components of total household debt, but the impact is strongest on non-revolving debt (installment loans), which is used to finance the purchase of consumer durables. We argue and provide evidence that the income inequality effect on consumer borrowing is a result of conspicuous consumption. Rising income inequality has forced households with smaller income gains to use debt to keep up their consumption level relative to households with larger income gains.JEL Classification: D12, G29, J31, M30     

Consumer bankruptcy in Utah (USA): who files and why?

This study examined consumer debtors who filed for bankruptcy and their reasons for filing in Utah, the U.S. state that ranked first in household filing rate in 2002–2004 and consistently ranks in the top ten of the 50 states. The purpose of the study was to determine the demographic characteristics of debtors and reasons for filing. Data were collected during 2004–2005 via survey from 508 debtors. The debtors reported employment problems, medical expenses, divorce or other family problems, as well as trouble managing their finances and overuse of credit cards. More than half of the debtors owed medical providers. Debtors were more likely to report a reduction in income than job loss. Self‐employed persons were over represented. Respondent debtors are less educated, less likely to be married and less likely to own a home compared with Utahns and other Americans. Contrary to expectations, debtor households were smaller than the state average, which may be due to the young age of debtors. Results suggest that in order to reduce the bankruptcy rate in Utah, consumer educators should target renters, adults with less than a college education, divorcing persons and small business owners. Utah's mandate for a personal finance graduation requirement should be implemented early in the secondary school curriculum.     

Relational foundations of an unequal consumer credit market: Symbiotic ties between banks and payday lenders

Banks have financially supported payday lenders for decades. In this article I qualitatively demonstrate how these financial relationships have reinforced and expanded a bifurcated consumer credit market, and why these relationships matter for consumer access to financial services. I use archival financial documents from publicly traded payday lending companies between 1996 and 2014, available through the Securities and Exchange Commission, to construct the bank-payday lender network and reveal motivations for these financial relationships. I find that bank-payday lender relationships are sustained over many years, and that these relationships are mutually beneficial, enabling payday lender expansion and providing a way for banks to quietly profit from high-interest lending in the face of other regulatory constraints. Further, I show that these relationships have significantly reshaped the consumer credit market over the past two decades. I conclude by considering broader implications of symbiotic institutional relationships in contemporary markets.     

Ethnography for marketers: A guide to consumer immersion

Fuat F?rat has for a long time maintained a radical, outside and critical voice within marketing and consumption theory. He was one of the editors of the landmark book Radical and Philosophical Theory in Marketing, published in 1987, which sought to develop alternative modes of theorizing and conceptualizing both marketing practice and the consuming subject. The continuation of that wider project eventually lead to the foundation of Consumption Markets &; Culture, the journal for which Fuat served as Editor-in-Chief for its initial 10 years of existence. Fuat also co-authored the book Consuming People (1998) in collaboration with Nikhilesh Dholakia. By that stage, in particular following his seminal article on the re-enchantment of consumption, written with Alladi Venkatesh, Fuat had helped to pioneer the study of postmodernism within consumer culture. In this interview, Fuat F?rat discusses his research projects including consumption patterns, postmodernity, theatre, new literacy and also presents more general observations.     

Consumer transactions with SMEs: implications for consumer scholars

Historically, the consumer movement has defined business as big business. This paper proposes that we shift the focus to consumer transactions with small‐ and medium‐sized enterprises (SMEs). After SMEs are defined, facts about the realities of SMEs are used as stepping stones to develop the idea that consumer interactions with SMEs are different than those with large firms and merit the attention of consumer scholars. Thirteen recommendations are tendered for future research including rethinking our traditional approach to consumer behaviour theory, consumer policy, and consumer movement theory.     

Comparative analysis of Canadian,American and Swedish bankruptcy policy: why do governments legislate consumer debt?

Comparative research in consumer bankruptcy law is scarce. After profiling bankruptcy statistics in each country, the paper compares bankruptcy laws in Canada, United States and Sweden across 20 criteria and then analyses the predominate ideology underlying each law: deviant behaviour modification, consumer protection or social safety net. There is obvious tension between ideologies in each country with the punitive, deviant behaviour modification paradigm the most pervasive across all three countries. There is much we can learn from a comparative policy analysis approach, leading to the conscious development of bankruptcy policy from discernible, declared ideologies. Seven areas for future research are proposed.     

The concept of consumer vulnerability: Scale development and validation

Although studies of nonrational consumer behaviour in the fields of psychology and marketing are widespread, few scholars have discussed this issue from the integrated perspective of individual characteristics and consumer welfare. Extant research has introduced the concept of consumer vulnerability to deepen the study of nonrational behaviour. The present research defines consumer vulnerability as an individual characteristic, that is, a tendency to be influenced by an external stimulation or temptation that leads to decisions harmful to the person's own welfare. To operationalize this concept, this study develops a consumer vulnerability scale. Results from exploratory factor analysis and confirmatory factor analysis reveal the following seven dimensions of consumer vulnerability: product knowledge, product promotion, marketing and emotional stress, social pressure, purchasing power, refunds policy and discrimination ability. After verifying the scale's reliability and validity, this study confirms that it can be applied to measure the degree to which consumer welfare has been harmed and predict nonrational decision‐making behaviour. Limitations and future research directions also are discussed.     

The UK Food Standards Agency: putting the consumer first

The Food Standards Agency was set up in April 2000 to protect the health of the public and the interests of consumers in relation to food. Its principal purpose is to put the consumer first. But what does this mean in practice? The Agency is finding ways to help consumer organizations and consumer representatives contribute more effectively to its work. However, consumer organizations cannot hope to represent the full range of consumer perspectives, and so the Agency is keen to reach out to individual consumers using a variety of innovative mechanisms. This article will describe why the Agency was established and how it achieves its main objective of putting the consumer first. It will discuss how the Agency is developing and testing new ways of working to ensure that the consumer perspective is fully accounted for when developing and evaluating policies, including setting up an influential new Consumer Committee. It will go on to highlight a number of recent innovative consumer consultations and structures that have been established to involve consumers in Agency policy making. It will discuss these processes and how the lessons that have been learnt are informing future Agency strategies. The article will then describe how the Agency protects consumers through effective risk communication strategies and how its Annual Consumer Attitudes Survey will help it measure success so that it can continue to set new stand‐ards in putting consumers first in relation to food.     

Conceptualizing and measuring consumer social responsibility: a neglected aspect of consumer research

Despite the availability of extensive research on a wide range of consumer‐related areas, some socially sensitive consumer issues have still remained relatively unexplored. Since literature review revealed a gap in the conceptualization of consumer social responsibilities, this article conceptualized, developed and validated a measurement scale for consumer social responsibility (CnSR), using a rigorous methodology suggested in the scale development literature. The study responded to the scholarly calls for further research in this area. Using a total sample of 491 respondents (53 respondents for pilot, 207 for exploratory survey and 231 for confirmatory survey), the study proposed a six‐dimensional measurement scale for CnSR, including: (1) social impacts, (2) solidarity, (3) critical appraisal, (4) supporting business growth, (5) environmental impacts and (6) action. It is argued that with ever growing impacts of corporate social responsibility on business practices, the validated measurement scale will contribute to the advancement of research in this nascent consumer area.     

Construction of consumer choice in the market: challenges for environmental policy

Drawing from the literature on the analytics of government, the paper discusses marketing as a form of government, elaborating and illustrating the many ways in which consumer choice is shaped, modified and directed in the market through practices and techniques of consumer marketing. The aim is to critically reflect upon and render problematic the individualistic ideas of the green consumer as a powerful market force and to provoke discussion on the conceptualization – and construction – of consumer subjectivity and social problems in marketing. Taking examples particularly from the fashion and clothing industry, the paper discusses the ways in which marketing activities come to shape consumer conduct by operating through the choice of individuals who freely pursue their needs and desires, and by working on the environment within which this freedom of choice is exercised. The paper contributes to the literature on green consumerism by systematically interrogating and elaborating on the modes and practices of marketing thought and expertise through which consumers and consumption are rendered intelligible and actionable in the market.     

Chinese consumer finance: A primer

Chinese consumer finance has been booming recently, especially since 2014. However, research on this topic is scant. This study presents an updated analysis, providing original, significant contributions for academics, investors, and policymakers. We explore five perspectives: (1) macroeconomics: policies adopted by the Chinese government to enhance economic growth through promoting personal consumption; (2) financial market: China’s different types of consumer finance institutions and their financing; (3) consumers: improvements in financial inclusion and consumer protections; (4) regulations in the context of supply-side structural reforms; and (5) potential areas for future academic research.     

Consumer understanding of food labels: toward a generic tool for identifying the average consumer

The ‘average consumer’ is referred to as a standard in regulatory contexts when attempts are made to benchmark how consumers are expected to reason while decoding food labels. An attempt is made to operationalize this hypothetical ‘average consumer’ by proposing a tool for measuring the level of informedness of an individual consumer against the national median at any time. Informedness, i.e. the individual consumer's ability to interpret correctly the meaning of the words and signs on a food label is isolated as one essential dimension for dividing consumers into three groups: less-informed, informed, and highly informed consumers. Consumer informedness is assessed using a 60-question test related to information found on a variety of Danish everyday food products and divided into factual questions and informedness about signpost labels. A test was made with 407 respondents who participated in four independent studies on fairness in consumer communication, and the average score for all was 57.6% of correct answers. A score of 64% and beyond would place a consumer in the upper quartile (the group of highly informed consumers), whereas a score of 52% or below would place the individual in the lower quartile (the group of less-informed consumers). Female respondents performed better than males on label recognition, and those around 40 years of age irrespective of gender performed best on factual knowledge, whereas those aged around 30 performed best on label recognition. It is foreseen that independent future studies of consumer behavior and decision making in relation to food products in different contexts could benefit from this type of benchmarking tool.     

Consumer Support Networks: improving consumer advice in the UK

In 1999, Central Government launched an initiative to establish Consumer Support Networks (CSNs) throughout Scotland, England and Wales. The purpose of the networks is to improve access to high quality consumer advice services. Information and advice agencies will join together to provide expert, accurate and timely advice for consumers. By April 2002, 191 networks had been established covering in excess of 99% of the population. Only one local authority area in England has yet to establish a network. This paper reviews the development of consumer information and advice provision in the UK and considers the context for establishing CSNs. It also examines the need for consumer advice, the role of Central Government and the quality framework. Each CSN will conduct a gap analysis and assess the need for consumer advice in the local area. This will enable the network to develop a good understanding of consumers in the area and to take a more strategic approach in planning service developments to meet the identified needs. Consumer Support Networks aim to improve the provision of consumer information, education and advice. The literature suggests that consumers who are well educated regarding their rights are empowered through an increased ability to exercise them. Clearly branded advice services, marketed effectively to the public should result in higher levels of consumer awareness and, consequently, improve access to services. It is also expected that better flows of information between agencies will result in greater protection for consumers. Sharing ‘best practice’ nationwide should stimulate service improvements throughout.     

Gender,fashion consumer group,need for touch and Korean apparel consumers' shopping channel preference

Shopping preferences are affected by the culture in which an individual grows up as well as by individual differences in consumers such as differences in gender, fashion leadership and need for touch. The current study examined the influence of consumers' need for touch and fashion leadership on preference for shopping outlets (e.g. touch and non‐touch shopping channels) between genders and within a particular culture. The purpose of this study was to examine gender, fashion consumer group, need for touch and Korean apparel consumers' shopping channel preference. Participants were a convenience sample of 262 Korean college students who were recruited in Changwon, South Korea. A questionnaire was compiled that included a request for demographic information, the Need For Touch scale, the Measure of Fashion Innovativeness and Opinion Leadership, and items assessing preference for touch and non‐touch shopping channels for clothing. Women and men did not differ in overall need for touch or instrumental need for touch. Fashion change agents and fashion followers did not differ in their preference for touch and non‐touch shopping channels. Preference for touch shopping channels was more greatly affected by variables such as need for touch, gender, and fashion innovativeness and opinion leadership than preference for non‐touch shopping channels. Preference for non‐touch shopping channels was virtually unaffected by the variables examined in the current study. Implications for theory and research are provided.     

The impact of consumer decision‐making styles on consumer confusion in Mauritius: An empirical analysis

This article investigates the effects of consumer decision‐making styles on consumer confusion and harm. While consumer confusion has been well documented in the literature, this investigation attempts to bridge our understanding on its relationship with consumer decision‐making styles. Empirical data was collected from a field survey where 400 consumers selected at 20 supermarkets in Mauritius were asked to respond to a questionnaire measuring three variables under study: consumer confusion, consumer decision‐making styles, and situational factors. Findings from the MANOVA parametric test showed that there is a significant difference between consumer decision‐making styles and consumer confusion. Even when covariate situational factors were controlled through the parametric test MANCOVA, results still showed a significant difference between consumer decision‐making styles and consumer confusion. More specifically, ANCOVA tests showed that the findings were specifically significant for three types of confusion: product confusion, packaging confusion, and product complexity. The study tends to confirm that a consumer's style of decision making does impact on consumer confusion.     

Reorienting consumer education using social learning theory: sustainable development via authentic consumer pedagogy

The paper illustrates the growing interest in understanding consumer behaviour through a social learning theory (SLT) lens, and explains the recently launched United Nations Decade for Education for Sustainable Development (ESD). Then, the discussion turns to an overview of a recently developed ESD/SLT integrated theoretical framework, which is then applied to consumer education via an authentic pedagogy. The paper highlights the rich potential of authentic intellectual work in the form of observational learning by augmenting ESD within authentic consumer education curricula.     

E‐commerce: consumer protection issues and implications for research and education

The impact of e‐commerce on consumers, public policy, business and education is examined. It behoves academics and students alike to keep abreast of new developments in this field and to contribute to the public debate on the widespread effects of e‐commerce. A discussion of public policy initiatives, research questions and ideas for future research are given.