GC19/3: Guidance for firms on the fair treatment of vulnerable customers

The publication of our second consultation including feedback statement and CBA has been delayed. Please see our page on coronavirus information for firms for further updates. This work remains a key priority for the FCA and Director of Consumer & Retail Policy, Nisha Arora’s speech at the TISA Vulnerability Conference in February highlighted our aims for this work.

We are consulting on Guidance for firms on the fair treatment of vulnerable customers in order to provide regulatory clarity for firms involved in the supply of products or services to retail customers who are actually, or are potentially, vulnerable.

Read GC19/3 (PDF)

Background to this consultation

In our Approach to Consumers, published July 2018, we set out our vision for a well-functioning market that works for consumers. The aim of our approach is to ensure that the practical application of our powers and tools achieves good high-impact outcomes for consumers that make a difference. As part of our approach, we committed to consult further on Guidance for firms on the treatment of vulnerable consumers.

Who this applies to

The Guidance is relevant to all firms involved in the supply of products or services to retail customers even if they do not have a direct client relationship with the customers.

Summary of our proposed guidance

The draft Guidance is set out in three main sections:

  • Understanding the needs of vulnerable consumers.
  • Ensuring staff have the skills and capabilities needed.
  • Translating that understanding into taking practical action.

This Guidance consultation does not aim to provide a checklist of required actions, rather it provides options for ways in which firms can comply with the principles. Precisely what the Guidance means for individual firms will depend on the specific context of the firm, including, amongst other things, firm size, the markets it operates in and the characteristics of its customers.

We want to be confident that the Guidance drives the improvements we want to see across the industry. We have decided to adopt a two-staged approach to consulting. During this first stage, we will continue to build on the work we have already done to understand in more detail how firms will be affected by this Guidance and, where possible, quantify the costs and benefits that this Guidance will create.

The two stages of consulting on the draft guidance will be as follows:

First stage: We are seeking feedback on three particular areas;

  1. Whether the draft Guidance covers the right issues and would provide firms with the right degree of clarity on what they should do to improve the outcomes for vulnerable consumers.  
  2. How this Guidance could affect firms’ costs and the extent of benefits to vulnerable consumers from changes triggered by the Guidance. 
  3. We also want to hear stakeholders’ views on whether the Guidance, as part of the FCA’s regulatory framework, is sufficient to ensure firms take appropriate action to treat vulnerable consumers fairly, or whether stakeholders consider that we need additional policy interventions, such as additional rules, to ensure this happens. 

Second stage: In the light of this feedback, we plan to consult on revised draft Guidance, publishing a cost-benefit analysis alongside it. If we consider further interventions are necessary, we would also consult on those in the second stage.

Next steps

This consultation has now closed.

We will carefully consider your feedback to this consultation and plan to issue a response in H1 2020.