Consumer vulnerability has emerged as one of the key areas of focus for regulators, consumer groups, debt charities and providers of consumer credit. In February 2015, the Financial Conduct Authority (FCA) published its occasional paper on consumer vulnerability to broaden understanding of the issue and offer guidance to firms in developing a vulnerability strategy. This resulted in the setting up of the BBA financial services vulnerability taskforce, the final recommendations from which were published in February 2016.
We published a report in January 2014, following a desktop exercise which included a review of the policies and procedures employed at 15 subscribers for the identification and management of customers with mental health problems and those classified more widely as vulnerable. We undertook further analysis on the information submitted as part of this review to identify areas of good practice, which we published in November 2014; our findings highlighted over 49 categories of vulnerability across firms, demonstrating the need for a consistent definition and approach across the financial services sector.
The treatment of customers in vulnerable circumstances, at all stages of the product lifecycle, is critical – starting with the culture and business model of a firm, the design and targeting of a product or service and its promotion and sale, through to the ongoing product and account servicing relationship with the customer, taking account of any change in circumstance, including any debt collection or debt sale activity. The objective of our most recent Customers in Vulnerable Circumstances development review, which we completed in 2016, was to understand how firms identify customers in vulnerable circumstances wherever they may be in the ‘customer journey,’ and the support and guidance that is offered.