Consumer Choices
This term names the step-by-step process a buyer uses to choose what to purchase, including researching products, comparing features, and weighing costs and benefits.
Consumer decision making.
A scam where attackers impersonate legitimate organizations by email or text to steal login credentials is called what?
Phishing.
The laws and regulations designed to protect buyers from fraud, unsafe products, and unfair practices are called what?
Consumer protection laws.
The yearly percentage cost of borrowed money, including interest and fees, often used to compare loans is abbreviated as what?
A consumer notices ads, friends’ posts, and influencer endorsements shaping their wish to buy a product. Name the category of influence described.
Social media influence (or social proof / influencer marketing).
Name the security method that requires two or more verification forms (for example, password + code sent to phone).
Multi-factor authentication (MFA).
If a product fails within the manufacturer’s stated period, the consumer may be covered by this seller promise to repair or replace it. What is it called?
The process of gradually paying off a debt over time with regular payments (commonly used for mortgages and car loans) is called what?
When comparing two phones with different features, a shopper considers what they must give up to buy the higher-priced option. This trade-off concept is known as what?
Opportunity cost (trade-off).
A scheme relying on new participants’ money to pay earlier members rather than legitimate profits is called what? (Accept either of the two related terms.)
Ponzi or pyramid scheme
List two buyer remediation options beyond asking the vendor for a refund (name agencies or legal actions).
Define the debt repayment strategy that focuses on paying off the highest-interest debts first. Give its common name.
Describe two responsibilities of buyers that help protect them if a product fails or a transaction becomes disputed. (Name two.)
Read terms & conditions; keep receipts/warranties; save documentation; protect account credentials (any two).
A campaign collects money for a product but the creator disappears and never delivers rewards. What kind of scam is this? Also name one step a consumer should take if they suspect this.
Crowdfunding scam; report the campaign, save evidence, request refund from platform, contact payment provider, and report to authorities.
A consumer finds misleading pricing on an online listing. Name the consumer right that supports correcting such information and one practical step they can take to enforce it.
Explain what a secured loan is and give one common example of collateral used to secure loans.
Explain how stockpiling (panic buying) can worsen shortages and identify one real-life consequence for low-income consumers.
Stockpiling/panic buying increases short-term demand, can create shortages and price increases; low-income consumers may be unable to buy essentials or face higher prices.
Identify three red flags that suggest a solicitation might be fraudulent (scam). Provide at least three distinct indicators.
Examples: requests for gift card payments or secrecy; urgent pressure to act now; unsolicited requests for personal/financial info; poor grammar or spoofed email addresses; offers that seem too good to be true.
Explain the difference between a legitimate chargeback and refund fraud. Include how each affects consumers and vendors.
Legitimate chargeback: consumer disputes an unauthorized or incorrect charge and bank reverses transaction after investigation;
refund fraud: falsely claiming product was defective to get money back (harmful to vendors);
legitimate chargebacks protect consumers from fraud but excessive false claims can harm merchants and lead to stricter policies.
Compare and contrast a fixed-rate mortgage and an adjustable-rate mortgage; list one advantage of each.
Fixed-rate mortgage: interest rate stays the same over the loan term — advantage: payment stability.
Adjustable-rate mortgage (ARM): interest rate can change after initial period — advantage: often lower initial rates (potentially lower initial payments).