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FCA warns firms on processes for vulnerable consumers

FCA warns firms on processes for vulnerable consumers

The Financial Conduct Authority has warned that providers are putting vulnerable consumers at risk of detriment by using ‘a computer says no’ approach when they seek help on financial issues.

The regulator’s consumer vulnerability paper, published today (23 February) at the British Bankers’ Association conference, is the first step in a conversation with firms to determine how they can work together to address these issues.

The UK’s ageing population, as well as changing trends in public health and society, mean that developing more inclusive policies will become increasingly important, according to the FCA.

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Martin Wheatley, the regulator’s chief executive, stated that they 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,” he added.

The FCA’s research revealed that the response of staff both on a helpline or in branch is crucial to customers’ experience and outcomes, adding that while frontline staff do not need to be experts, they should know where internal expertise lies and when to refer people on.

It also found that some firms have an inaccurate or overzealous approach to the rules, such as those around data protection or affordability, preventing them meeting the needs of vulnerable consumers.

One example given in the report was of a cancer patient who told the FCA 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.

Going forward, the FCA’s vulnerability team will work with internal colleagues in a range of departments to embed the practical side of its work across the regulator’s functions.

“The FCA’s supervisors are the key point of contact between the regulator and firms so work has been going on to develop training around awareness of vulnerability; and to provide a toolkit which arms supervisors with the questions they need to use in their interactions with firms,” read the report.

The regulator recognised that some firms are in the initial stages of grappling with the issues outlined within this paper. “As such, this paper represents an intention to work with industry to improve awareness of vulnerability issues,” it added.

peter.walker@ft.com