Saturday, March 2, 2013

Show Me The Money: Behavioral Economics And Consumer Protection | The New Republic

Show Me The Money: Behavioral Economics And Consumer Protection | The New Republic


One of the central missions of the new Consumer Financial Protection Bureau is to ensure that people “know before they owe.” Showing an appreciation of behavioral economics, the Bureau has been interested in two different approaches. First, it is promoting clear and simple disclosure, so that people can learn, more or less at a glance, about the agreements that they are about to enter into. 

This makes agreement more Bi transparent so communities are less likely to be deceived. 

Second, it has referred to “smart disclosure,” which occurs when public or private institutions disclose detailed information in standard, machine-readable formats. 

This makes for normal documents where attempts to hide details in small print are deceptive and deviant.

This information can be used by intermediaries, often through apps that display that information in new and creative ways. It is easy to imagine consumer-friendly disclosure of the central features of a variety of credit card and mortgage agreements, allowing people to make informed comparisons and to choose the plan that is best for them.

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