unit 1.8 - consumer protection

Question 1

capital

Answer 1

money of other assets owned by an individual or business. In the cases of financial services providers, it refers to the funds provided by the shareholder, not deposits from customers.

Question 2

chancellor of the exchequer

Answer 2

the British cabinet minister responsible for financial and economic matters and in charge of the treasury.

Question 3

citizens advice

Answer 3

charity providing fee, independent, confidential and impartial advice on citizens and consumers rights and responsibilities.

Question 4

competition and markets authority

Answer 4

independent, non-ministerial government department, which works to promote competition between providers so that customers benefit.

Question 5

consumer credit

Answer 5

another term used for borrowing. ‘raking credit’ or ‘buying credit’ refers to borrowing.

Question 6

credit crunch

Answer 6

reduction in the availability of loans or a tightening of the conditions needed to obtain one. Global financial crisis of 2007-08 began when financial institutions became reluctant to lend funs to one another.

Question 7

credit union

Answer 7

mutual organisation (owned by members) THAT OFFERS A RANGE OF FINANCIAL PRODUCTS mMEBERS OF A CREDIT UNUION MUST SHARE A COMMON BOND, (ALL WORK FOR THE SAME EMPLOYER)

Question 8

current account

Answer 8

bank or building society accounts where people can store their money in the form of electronic balances and withdraw it to make payments.

Question 9

debit card

Answer 9

card that can be used to withdraw cash, make face to face transactions and to make payments online or over the phone.

Question 10

deposit

Answer 10

sum of money placed by a customer with a financial services provider

Question 11

financial conduct authority (FCA)

Answer 11

one of the 2 main regulators of financial services in the UK. Its role includes protecting consumers, keeping the industry stable, and promoting healthy competition between financial service providers.

Question 12

Financial Ombudsman Service (FOS)

Answer 12

independent body set up by parliament that settles customer complaints about providers at no change to customers.

Question 13

Financial policy committee (FPC)

Answer 13

part of the Bank of England that monitors and responds to risk posed to the entire financial services market, Focus on the whole market makes it a macro-prudential authority.

Question 14

Financial services compensation scheme (FSCS)

Answer 14

compensation scheme that pays compensation to account holders up to a certain amount per provider if the provider goes into default.

Question 15

Independent commissions on banking

Answer 15

committee formed in June 2010, as a response to the global financial crisis. It considered reforms to the UK banking sector to promote both financial stability and competition

Question 16

independant financial adviser (IFA)

Answer 16

professional who makes financial recommendations to clients, based on available products across a wide range of providers

Question 17

investment banks

Answer 17

banks that are involved in trading financial assets such as shares, underwriting issues of shares by other institutions and advising on mergers and acquisitions. Investment banks provide services such as current accounts ect.

Question 18

liquidity

Answer 18

assets that a business holds in the form of cash, that can be used to meet immediate demands for a payment.

Question 19

money advice service (replaced by moneyhelper)

Answer 19

consumer information service set up by the government to help people make informed financial decisions

Question 20

money and pensions service (MaPS)

Answer 20

brings together financial guidance services and content on money and pensions through MoneyHelper.

Question 21

money laundering

Answer 21

process of making ‘dirty’ money (criminal activities) ‘clean’.

Question 22

mortgage

Answer 22

loan taken out to pay for a property, usually over a long period.

Question 23

Office of Fair Trading (OFT)

Answer 23

government department that monitored how businesses compete with each other, It was abolished in April 2014 and its responsibilities shared between the FCA and the CMA

Question 24

overdraft

Answer 24

facility that allows an account holder to withdraw more money than they actuallyy have in their account. Authorised is agreed with the bank in advance within certain limits. Unauthorised may not be authorised.

Question 25

payday loans

Answer 25

loan designed to be taken out for only a very short period, which charged a very high APR.