Topic 8: Consumer protection Flashcards
(32 cards)
Capital
The money or other assets owned by an individual or a business. In the case of a financial services provider, it refers to the funds provided by the shareholders, not deposits from customers.
Chancellor of the Exchequer
The British Cabinet minister responsible for financial and economic matters and in charge of the Treasury
Citizens advice
A charity providing free, independent, confidential and impartial advice on citizens’ and consumers’ rights and responsibilities
Competition and Markets Authority (CMA)
An independent, non-ministerial government department, which works to promote competition between providers so that customers benefit.
Consumer credit
This is another term used for borrowing. It is important to understand that ‘taking credit’ or ‘buying on credit’ refers to borrowing. However, a credit into a bank account means paying money in.
Credit crunch
A reduction in the availability of loans or a tightening of the conditions needed to obtain one. The global financial crisis of
2007–08 began when financial institutions became reluctant to lend funds to one another.
Credit union
A mutual organisation (that is, owned by its members) that provides a range of financial products, eg savings accounts and
personal loans to members. Members of a credit union must share a common bond, eg all work for the same employer or all
work in the same district.
Current account
Bank or building society accounts where people can store their money in the form of electronic balances and withdraw it to make payments.
Debit card
A card that can be used to withdraw cash, to make face-to-face transactions in, for example, shops, and to make payments online or over the phone.
Deposit
A sum of money placed by a customer with a financial services provider.
Financial Conduct Authority (FCA)
One of the two main regulators of financial services in the UK (the other is the Prudential Regulation Authority)
Financial Ombudsman Service (FOS)
An independent body set up by Parliament that settles customer complaints about providers at no charge to consumers.
Financial Policy Committee (FPC)
A part of the Bank of England that monitors and responds to risk posed to the entire financial services market. Its focus on
the whole market makes it a macro-prudential authority.
Financial Services Compensation Scheme (FSCS)
A compensation scheme that pays compensation to account holders of up to a certain amount per provider if the provider
goes into default (in other words cannot pay account holders the money they have in their accounts).
Independent Commission of Banking (ICB)
A 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.
Independent Financial Advisor (IFA)
A professional who makes financial recommendations to clients, based on available products across a wide range of providers.
Investment banks
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 do not provide services such as current accounts, etc – these are provided by retail banks.
Liquidity
The assets that a business holds in the form of cash, that can be used to meet immediate demands for payment. (Many assets
cannot be used in this way – for example a company that owns a building or machinery would have to sell them in order to make
a payment.)
MoneyHelper
An independent organisation set up by the government to support people to make the most of their money and pensions
Money Laundering
The process of making ‘dirty’ money (money gained from criminal activities) ‘clean’ – in other words making it look as though it has been acquired legitimately.
Mortgage
A loan taken out to pay for a property, usually over a long term such as 25 years
Office of Fair Trading (OFT)
The government department that monitored how businesses compete with each other. It was abolished in April 2014 and its
responsibilities shared between the Financial Conduct Authority and the Competition and Markets Authority
Overdraft (authorised and unauthorised)
A facility that allows an account holder to withdraw more money than they actually have in their account. An authorised overdraft
is agreed with the bank in advance within certain limits. Exceeding those limits or going overdrawn without permission is
an unauthorised overdraft, and attempted withdrawals may not be honoured.
Payday loan
A loan designed to be taken out for only a very short period, which charges a very high APR
