lob Flashcards
(26 cards)
What is a financial institution?
Company that manage, save, borrow, or invest money, like banks, credit unions, or insurance companies.
What are examples of financial institutions?
Bank of England
Banks
Building societies
Credit unions
National Savings and Investments
Insurance companies
Pension companies
Pawnbrokers
Payday loan companies
What are the advantages and disadvantages of banks?
Advantages: Offer various services like saving and credit.
Disadvantages: May charge high fees and interest.
How are building societies different from banks?
Owned by members, not shareholders.
Often provide better rates for savings and loans.
What are payday loans, and why should they be avoided?
Short-term loans with high-interest rates.
Risk of falling into a debt cycle.
What are the five methods of communicating with banks?
Branch banking
Online banking
Telephone banking
Mobile banking
Postal banking
What are the advantages and disadvantages of branch banking?
Advantages: Personalized service, in-person advice.
Disadvantages: Restricted to branch hours.
What are the advantages and disadvantages of online banking
Advantages: 24/7 access, convenient.
Disadvantages: No cash deposits, security risks.
What are the pros and cons of mobile banking?
Advantages: Easy access via smartphone, 24/7 availability.
Disadvantages: Requires internet; potential security risks.
What are the pros and cons of postal banking?
Advantages: Traditional, no need for internet.
Disadvantages: Slow and less secure.
Why is consumer protection important in personal finance?
Prevents financial institutions from exploiting consumers.
Ensures fair treatment and safe practices.
What is the role of the Financial Conduct Authority (FCA)?
UK organization that makes sure financial companies, like banks follow the rules to protect customers .
What is the Financial Ombudsman Service (FOS)?
organization that helps solve problems between customers and banks if something goes wrong
What is the Financial Services Compensation Scheme (FSCS)?
organization that protects your money by paying you back if a bank, insurer, or other financial company get bankrupt.
What is the Office of Fair Trading?
organization that used to make sure businesses treated customers fairly.
What does consumer credit legislation regulate?
Ensures fairness and prevents exploitation in credit agreements.
What services does Citizens Advice provide?
Free advice on debt, benefits, banking, pensions, and insurance.
What is an Independent Financial Advisor (IFA)?
Provides expert advice on financial products like mortgages and pensions.
Must be qualified and regulated.
What do price comparison websites do?
Help compare the cost of goods and services across providers.
What is debt counselling?
Offers advice and tools to manage and reduce debt effectively.
What is an Individual Voluntary Arrangement (IVA)?
A formal agreement to repay debts over time, managed by an insolvency practitioner.
What is bankruptcy?
A legal process to resolve debts when they cannot be repaid.
May involve losing assets and affects credit history.
Advantaged and disadvantage of citizen advice
Advantage:
Free service
Disadvantage:
Trained volunteers may have limited information about topic
Advantage and Disadvantage of IFA
Adv:
Advice is given by a professional
Dis:
Services are money
