FinTech Consumer Protection

Plain-language explainer

What this means for you

A parent takes out a Buy-Now-Pay-Later loan for back-to-school clothes. The platform shows four equal monthly payments, no interest, no credit check. What the platform doesn't show as prominently: the late fee that triggers if any payment misses by a single day; the collections agency that owns the receivable within sixty days of the second miss; the impact on the parent's credit score from a data-furnishing arrangement disclosed in fine print. The clothes cost $180. The eventual cost is $540.

That pattern — financial products engineered to exploit predictable behavioral vulnerabilities in under-resourced consumers — is not accidental. BNPL platforms targeted at low-income consumers grew approximately five-fold between 2019 and 2024. Alternative credit-data products have produced uneven outcomes for households traditionally underserved by mainstream credit. Algorithmic mortgage-pricing systems produce racially disparate outcomes "without intent." The behavioral economics behind each product is well-understood — by the engineers who designed them.

The Institute of FAME funds research that examines which FinTech products genuinely expand access for under-resourced consumers and which extract from them. Our research base in this area centers on a 2023 study in Economies examining FinTech adoption and bank credit supplies in manufacturing SMEs — establishing the firm-level adoption-determinants framework subsequent research extends. A companion paper currently under review examines FinTech and gender disparities in EU sustainable-investment intentions, with direct implications for the gender-and-financial-inclusion agenda.

The protagonists in this work are not abstract. They're the parents managing BNPL receivables, the small-business owners whose merchant-services contracts auto-renewed at 35% above the original rates, the retirees who learned about hidden surrender penalties only after they were locked into 12-year annuity contracts. They are also the CFPB analysts and state attorneys general trying to write enforceable rules against the deceptive marketing, and the consumer-financial-protection advocates trying to translate behavioral-economics findings into operative regulation.

Your support funds the peer-reviewed research that becomes the evidence regulators cite when industry argues "consumers chose freely." Generational wealth is stripped one financial decision at a time. The research is how we prove what's happening. The policy translation is how we stop it.