Financial sector must treat vulnerable customers with more care and understanding, says the FCA

Financial ompanies need to take greater care and to have better strategies for dealing vulnerable customers, the Financial Conduct Authority (FCA) has said.

The regulator has produced a new report designed to increase understanding and to help companies develop better ways of identifying and helping vulnerable people.  It sets out best practice, but also highlights examples of people who have not been treated fairly, even when their difficulties should have been obvious.

Financial ompanies need to take greater care and to have better strategies for dealing vulnerable customers, the Financial Conduct Authority (FCA) has said.

The regulator has produced a new report designed to increase understanding and to help companies develop better ways of identifying and helping vulnerable people.  It sets out best practice, but also highlights examples of people who have not been treated fairly, even when their difficulties should have been obvious.

 The report points out that consumer protection laws are generally designed for the “average” or “typical” consumer, and make assumptions about what this average person might be expected to understand and how they might behave. 

 But vulnerable people – those who are ill, have suffered serious injury or recent bereavement, as well as those with mental health or dementia problems, or who struggle with reading or numbers – may be far less able to deal with financial matters than the average customer.

The report says that consumers in vulnerable circumstances “may be significantly less able to represent their own interests, and more likely to suffer harm than the average consumer. This is an area where firms can take action and create good outcomes for the customer.”

In many cases problems were caused by inflexible systems, while processes designed to stop fraud could mean that staff were not able to use discretion when dealing with a client in difficulty.

To read more on this story, click here

For the the full report, click here.

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