Research published by the Financial Conduct Authority (FCA) reveals that some vulnerable consumers seeking help from financial providers are meeting ‘a computer says no’ approach, putting them at risk of further detriment.
The FCA's Occasional Paper on Consumer Vulnerability, launched by chief executive, Martin Wheatley at the British Bankers’ Association conference on protecting consumers in vulnerable circumstances, is the first step in a conversation with firms to determine how the regulator and industry can work together to address issues around vulnerability. The UK’s aging population, as well as changing trends in public health and society, means that developing more inclusive policies will become increasingly important.
Martin Wheatley, chief executive of the FCA, said:
We all know somebody in a vulnerable situation and we can expect the number of people who find themselves in those circumstances to grow over the coming years. We all need to start thinking about what the solutions to these challenges will be. Whether it is accessing funds or securing a repayment holiday, we will work collaboratively with firms to identify what inclusive policies could look like and how best we can create the right outcomes for those consumers. It’s a challenge for regulators and firms alike.
The FCA’s research shows that many consumer protection policies are designed for a ‘typical’ consumer and sometimes not flexible enough to capture individual situations. Therefore, if frontline staff can recognise the signs of potential vulnerability, they can more easily refer customers to specialist support where appropriate.
Consumer organisations have also told the FCA that they are seeing people in difficult circumstances inevitably struggling with rigid policies within some firms, exacerbating already stressful situations.
One cancer patient told the FCA that they contacted their bank to discuss a temporary loss of income but instead of talking through their options, they were told to call back when their accounts were in arrears. In another example, a carer who held a legal Power of Attorney reported that she experienced problems with a cashier refusing to serve her, and another cashier refusing to accept her blind mother’s signature. We have seen evidence of repeated issues with Power of Attorney.
The FCA’s research also revealed:
The FCA’s analysis also shows that it is not just those people who experience sudden life-changing events that firms should consider when developing vulnerability strategies:
The Occasional Paper includes a Practitioners’ Pack to support firms’ understanding of how they can generate better outcomes and develop more inclusive services for vulnerable consumers.
The FCA will work with industry and trade bodies to discuss experiences, best practice and potential approaches around vulnerability issues.
For more information visit: fca.org.uk/consumer-vulnerability.
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