Customers in vulnerable circumstances
The FCA guidance on the fair treatment of vulnerable customers lays out how the FCA wants lenders to behave.
1It reminds firms that:
‘a vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care and that characteristics of vulnerability may result in consumers having additional or different needs and may limit their ability or willingness to make decisions and choices or to represent their own interests. These consumers may be at greater risk of harm, particularly if things go wrong. We expect firms to provide their customers with a level of care that is appropriate given the characteristics of the customers themselves.’
To achieve good outcomes for customers, firms should:
•understand the needs of their target market/customer base;
•ensure their staff have the right skills and capability to recognise and respond to the needs of vulnerable customers;
•respond to customer needs through product design, flexible customer service provision and communications;
•monitor and assess whether they are meeting and responding to the needs of customers with characteristics of vulnerability and make improvements where this is not happening.
The guidance provides some examples of good practice for firms.