FCA: industry needs to tackle vulnerability

FCA: industry needs to tackle vulnerability

The FCA will be encouraging financial services firms to review how they deal with vulnerable customers, Martin Wheatley has said.

The chief executive of the City watchdog was speaking at the launch of a 119-page occasional paper on consumer vulnerability.

Mr Wheatley said the paper’s publication is the first step in a “conversation” with firms on how the industry can address these issues.

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He 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.”

He said the FCA would work collaboratively with firms to identify what inclusive policies could look like and how best the industry can create the right outcomes for those consumers.

“It’s a challenge for regulators and firms alike”, he added.

The FCA’s definition of vulnerable includes low literacy and numeracy, mental health problems, physical disability, being over the age of 80 or being an ex-offender.

Its research has found examples including a cancer patient who contacted their bank to discuss a temporary loss of income but was told to call back when their accounts were in arrears and a bank refusing to accepts a blind woman’s signature.

The paper also sets out examples of what has worked well across the industry, such as training staff who deal with customers, having systems in place to record a customer’s needs and offering people with specific needs longer appointments in quiet areas.

The paper said: “The FCA sees the appropriate treatment of all customers, including those in vulnerable circumstances, as central to core conduct.

“We recognise 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.”

Adviser view

Anna Sofat, founder of London-based Addidi Wealth, said: “I had a case recently where someone had two bereavements in the space of 15 months and she was incredibly vulnerable and I do think we have to be mindful of where a client is in their life.

“We are not a very touchy-feely industry.”