FCA to force firms to help vulnerable customers
The Financial Conduct Authority (FCA) has launched a consultation on proposed guidance for financial firms on the fair treatment of vulnerable customers.
The guidance sets out the FCA’s view of what the FCA principles require of firms to ensure that vulnerable consumers are consistently treated fairly across financial services sectors.
Proposed improvements include better training to help front-line staff identify vulnerable customers – these could be customers suffering from physical and mental health conditions, bereavement or a lack of confidence when dealing with financial matters.
Christopher Woolard, FCA executive director of strategy and competition, said: “Protecting vulnerable consumers is a key priority for the FCA and we want to see firms explicitly embedding the fair treatment of vulnerable consumers into their culture. Where we find that firms are not doing enough to ensure that consumers are treated fairly, we will take action.
“Firms need to take particular care to ensure that vulnerable consumers are treated fairly as they may be more likely to experience harm. The guidance should drive improvements across the industry, improving outcomes for millions of vulnerable consumers.”
Figures from StepChange Debt Charity show that 36 per cent of the charity’s clients in 2018 had “additional vulnerabilities”. A StepChange report titled Breaking the Link last year highlighted the correlation between vulnerability and debt.
Peter Tutton, head of policy at StepChange, said: “Our research shows the extra problems vulnerable people can face and the difficulty of resolving problems. This FCA guidance is a vital step to a market that works well for all people. We look forward to the focus it should produce on ensuring products and services take account of the needs of vulnerable consumers by design. So we welcome the FCA’s new guidance, and urge the regulator to implement it as soon as practical and to monitor it closely.”
The guidance will be consulted on in two stages and the FCA is asking for comments on the first stage of the consultation by 4 October 2019.