B3:Customer Protection In Relation To Personal Finance Flashcards
In relation to personal finance, what is consumer protection
There are laws and regulations responsible for protecting the rights of consumers. They are there to help ensure that the consumer is not treated unfairly or exploited.
Why are there laws for protecting the rights of consumers?
To help ensure that the consumer is not treated unfaily or exploited.
What are some examples of organisations and laws concerned with protecting consumer rights?
- Financial Conduct Authority (FCA)
- Financial Ombudsmen service (FOS)
- Financial Services Scheme (FSCS)
- Office Fair Trading (OFT)
- Legislation consumer credit
What is the financial conduct authority (FCA)?
The FCA aims to make sure that financial markets work well so consumers get a good deal.
What is the FCA funded by?
By membership fees charged to financial service providers.
What are the three main areas that the FCA focuses on ?
- authorisation- permitting financial service providers to trade
- supervisions- ensuring procedures and practices are in the interest of the consumer
- enforcement- using powers to ensure standards are maintained
What is the Financial Ombudsmen Service (FOS)?
Its an organisation appointed by the government to represent the interests of the consumer in disputes with financial service providers
How is the FOS funded?
It is funded by compulsory fees charged to all regulated financial institutions plus additional fees when actions are taken against an institution
When does the FOS get involved?
It becomes involved in disputes only if they cannot be satisfactorily sorted between the consumer and the financial institution prior to involving the FOS.
What is the Financial Services Compensation Scheme (FSCS)?
Its an organisation in the UK that will pay compensation to a consumer of financial services if the service provider is unable to
What is an example of what the the FCSC does?
Protects all savers in banks or building societies up to £85,000
I.e. if the financial institution goes bankrupt the savings will be refunded by the FSCS.
What is the Office of fair trading (OFT)?
A government organisation that was established to regulate all markets, including financial markets.
What was the OFT’s aim?
It was to encourage fair practices and healthy competition between financial institutions.
How long has the responsibility for financial institutions been passed on to the FCA?
Since 2014
What is Legislation: Consumer credit?
These are laws passed bu the UK government to enforce the regulation of any firm offering credit to consumers.
