We recently conducted a survey of 1,000 consumers to understand their relationship with their primary bank, and what makes them loyal and engaged. We hid a 12-question quiz on consumer financial rights in the survey—and unfortunately many respondents didn’t fare well. Only 30 percent of consumers got a passing grade.
We also found evidence of what banks have long understood: There is a correlation between financial literacy and better customer engagement. A financially literate consumer, for instance, is more likely to use bank services and less likely to switch banks.
In fact, we found that consumers who answered nearly 50 percent of the questions correctly were more satisfied and engaged with their primary banks than those who did not. Consumers who were most satisfied with their banks answered on average 47 percent of the questions correctly, and consumers who were most engaged with their banks answered 50 percent correctly. In contrast, unengaged consumers answered only 42 percent of the questions correctly, and unsatisfied consumers answered only 40 percent of the questions correctly.
Consumers were most informed on several topics:
- 73 percent of respondents knew they have the right to dispute inaccurate or incomplete data on their credit report.
- 69 percent knew that if their bank fails, their savings/checking account is protected by the federal government.
- 69 percent knew that information on Annual Percentage Rates (APRs) and annual fees must be included on applications for new credit cards.
- 60 percent knew their bank must send them information if a rate increase occurs on their adjustable rate mortgage.
- 57 percent knew that their bank must send information about annual fees prior to renewal of a credit/charge card.
- 55 percent knew that if they are denied a credit card or auto loan, their bank must send them written notification explaining the reasons for the denial.
- 81 percent thought a Credit Reporting Agency (CRA) did not need their written consent in order to provide their credit report to their employer.
- 79 percent did not know that debit card transactions are protected by the federal government.
- 78 percent did not realize that consumer information agencies can report negative information that is more than three years old.
- 75 percent did not know that while settling credit-related disputes, their credit rating is protected by the government.
- 74 percent of consumers thought they could always get access to their files at a CRA for free.
- Half of respondents did not know that if they are denied credit, they can receive a free credit report within 30 days of denial.