Protecting vulnerable consumers from over-indebtedness

Abstract

This is a paper about protecting vulnerable consumers from over-indebtedness. The first part of this paper will outline what is meant by vulnerable consumers, over-indebtedness, and why these are the key concepts that this paper is framed around. As this paper is predicated on an assumption that vulnerable consumers ought to be protected from over-indebtedness, the second part of this paper defends that assumption. The third part of this paper is an exploration of three of the main causes of over-indebtedness, and which causes ought to be the ones that are targeted to help prevent the over-indebtedness of vulnerable people. The fourth part of this paper briefly outlines ways that the systemic problems that can cause over-indebtedness can be addressed. This paper argues that government subsidised low-cost loans, or cash grants, for people who are over-indebted due to vulnerability are an appropriate direction for further research that may be more welfare enhancing than other ways to address over-indebtedness caused by vulnerability.