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‘More important than ever’ vulnerable customers are treated fairly – FCA

  • 23/02/2021
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‘More important than ever’ vulnerable customers are treated fairly – FCA
The impact of the pandemic means it is more important than ever that vulnerable customers are protected and treated fairly by financial firms, the regulator has warned.   


The fair treatment of vulnerable customers should be embedded as part of culture and processes across financial firms, the Financial Conduct Authority (FCA) said as it issued updated guidance.

Using the guidance, the regulator will “hold firms to account for its treatment of vulnerable customers”.

The 57-page document outlined how businesses are expected to provide their customers with a level of care that is appropriate given the characteristics of the customers.

And that financial firms should understand what harms their customers are likely to be vulnerable to and ensure that customers in vulnerable circumstances can receive the same fair treatment and outcomes as other customers.

Firms’ senior leaders should “create and maintain a culture that enables and supports staff to take responsibility for reducing the potential for harm to vulnerable customers”.

Product design, communications and customer services are among the areas where the needs of these people should be considered at all levels and throughout the whole customer journey, the FCA said.

There are some 27.7million adults in the UK who now have characteristics of vulnerability such as poor health, experiencing negative life events, low financial resilience or low capability, according to the FCA.

Vulnerable customers may have limited ability to make reasonable decisions or could be at greater risk of mis-selling.

To achieve good outcomes for these customers, the FCA said firms should:

-Understand the needs of their target market/customer base

-Ensure their staff have the right skills and capability to recognise and respond to the needs of vulnerable customers

– Respond to customer needs throughout product design, flexible customer service provision and communications

– Monitor and assess whether they are meeting and responding to the needs of customers with characteristics of vulnerability, and make improvements where this is not happening

The FCA has also published a Memorandum of Understanding (MoU) with the Equality and Human Rights Commission (EHRC). This MoU sets out how the FCA will co-operate and work with the EHRC on equalities issues, to help protect people in financial services markets.

Nisha Arora, director of consumer and retail policy said: “Protecting vulnerable consumers remains a key focus for us and given the impact of the coronavirus pandemic, it is more important than ever that firms get this right.

“The guidance being announced today will help ensure vulnerable consumers are treated fairly and achieve outcomes as good as other consumers.

“While some firms have made significant progress, we want to see all firms across sectors taking steps to understand and respond to the needs of their customers, particularly those who are most vulnerable to harm.

“We also remind customers to tell your providers if you have specific needs – whether that’s due to ill health making it difficult to access a service, or a recent emotional or financial shock that is impacting your finances. Doing this will help firms support you.”

Tom Selby, senior analyst at AJ Bell, added: “Given the devastating impact Coronavirus and the national lockdown has had on people’s lives, it is no surprise the number of vulnerable or potentially vulnerable people in the UK has surged.

“In fact, over half the UK population – almost 28m people – now demonstrate characteristics of vulnerability. This is truly shocking and while we now have a roadmap out of lockdown, millions will face job and income insecurity in 2021 and beyond.

“Given this backdrop, it is positive to see the FCA re-emphasising the vital role financial services firms can play in identifying people who may be vulnerable today or at risk of being vulnerable in the future.

“Vulnerability, by its nature, can be transient and difficult to spot, so ensuring fair treatment of vulnerable and potentially vulnerable customers is at the heart of each firm’s culture is the right approach.”

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