Consumer protection | Scams & fraud | Financial literacy | Khan Academy

- So one thing to think
about as you think about

your own financial literacy is
what do you do in a situation

where you try to interact
with some type of a business

or a financial institution
and they either are

misinforming you in some
way or they're not doing

what they said they would do?

For example, let's say that
you buy something online

and you give the payment,
you give the credit card,

and they take the money from you

but they don't send you what you thought

they were going to send you.

Or let's say you buy a product
and it breaks immediately

and maybe it's still in warranty,

but they don't really fix that.

Who could you turn to?

Well, the main entity in
the United States for that

is known as the Better Business Bureau,

sometimes BBB for short.

And it's actually an
independent not-for-profit

but it exists for this exact reason.

If there's a business
that you think is doing

not so great business practices,

you can file a complaint with
the Better Business Bureau

and they actually will log that complaint

and they keep track the
same way that businesses

or financial institutions keep
track of your credit score.

The Better Business Bureau
keeps scores or ratings

for businesses on how good
their business practices are.

And it's somewhat
measured by the complaints

that people are putting
in on that business

and to what degree those
complaints are actually legitimate.

Now, it's not just about buying a product

or whether someone fixes
a product or warranty,

there's also situations
where people might use

misinformation or maybe
not complete information

or not complete education
to take advantage

of you the consumer.

There's a lot of situations
if you go back into actually

just world history where
especially financial institutions

say, hey, give us a
little bit of this money

and we'll invest it in really good ways

and it's gonna come out really well,

or we'll give you this loan

and there's no strings attached,

but maybe there are some strings attached.

Or maybe it was a more of
a loan than you realized

you were getting into,

or there's certain aspects of the loan

that might get you in trouble.

And to help prevent that
there is a federal agency

called the Consumer
Financial Protection Board.

It came out of the banking crisis of 2011,

when there were a lot of
folks who were kind of

not given all the details
or maybe didn't have all

of the necessary information
to make a decision

about taking out a big loan

or maybe the interest rate will
change dramatically, go up.

They didn't realize the
risks that were involved

of taking out a big loan for an asset

that was very speculative.

Maybe the price of that
might go down like a house

in an area where the housing prices

have just gone up a lot.

And more extreme examples
there's things like payday loans

where fairly vulnerable folks
might go into these loans

not understanding the interest involved

which is ginormous, to
use a technical word.

So that's what the Consumer
Financial Protection Board does

is to make sure that folks are informed,

that people aren't doing misinformation

or taking advantage of
people's lack of knowledge.

Now, those are the two big
ones on a federal level,

but there's also going to be other groups.

There's groups that help
monitor the types of securities

that might get issued.

You might say, well, what's a security?

Well, it's things like a stock or a bond.

And as you can imagine,
if there's some kind of

shady company that really
has nothing behind it

but says, hey, here's some shares

and these shares are
in the newest hot thing

like it's artificial
intelligence, biotech,

whatever, whatever, a
lot of people might say,

oh, I'm just gonna buy those
shares without realizing

there's no company behind it.

And so you also have groups that regulate

things like securities.

You have groups that regulate
especially at a state level,

insurance.

It's one thing for someone
to say they're going

to insure you and collect your premium,

but when the bad thing actually happens

and you need to get the the payout,

are they going to be there for you?

That's why insurance is
pretty regulated to make sure

that the people who say
they're offering insurance

are actually good for it.

So you need to be wary,
you need to be careful,

but you should also be conscientious

that there are entities out there

that are there to help
inform and protect you.