We need to look out for the vulnerable

They are very keen to push the message that they are helping customers, not just profiting from them.

Vulnerable people are the lucky ones who get the most benefit from this approach. Companies like to paint a pleasing picture of themselves offering a helping hand to those who need it.

We know that profits come first and help comes second for many companies

They are like a benevolent uncle, always on hand with some timely advice and – maybe – the odd tenner to help hard-up people through tougher timers. At least that is the picture that companies like to promote.

In practice, we know that profits come first and help comes second for many companies.

You may think that just a cynical view, but it was backed up last week by the Financial Conduct Authority’s latest update on its guidance on the treatment of vulnerable people.

While the regulator said it found many examples of good practice and businesses thinking carefully about their customers and potential vulnerability, that was not true across the board.

It said it “was aware” of cases where vulnerability was not considered by companies.

That is pretty poor in itself, but the FCA also reported that, shockingly, some vulnerable people are being “exploited for gain”.

In other words, some companies when encountering vulnerable people rub their hands together and think: ‘Hooray, a chance to rip someone off.’ That is terrible.

Before we go any further, let’s be clear about what we mean by vulnerable.

The FCA says a vulnerable person could have low resilience, low capability, be suffering a negative life event or having an ongoing health condition that affects their day-to-day activities.

It means people who may not be able to grasp what you consider simple financial concepts, such as pensions or even insurance.

It really does not matter the reason for their vulnerability, it just matters that they need a bit – or sometimes a lot – more help than others.

And it is not just a small number of people. The regulator reckons that just under half of UK adults – around 24m people – have one or more of the characteristics that could make them vulnerable.

Bear that in mind when you think about your clients – almost half of them could be vulnerable, even if only because of a recent event, such as a death in the family.

The FCA has published some detailed research on case studies of people who sought advice about insurance, their bank accounts, loans, overdrafts, critical illness cover, mortgages, and equity release.

I have had a good read of it and it is pleasing that in many cases, consumers were met with understanding responses.

But given these folk were vulnerable, it is astounding how poor the responses from people working in financial services were in some instances.

I think it is vitally important to remember that customers are someone’s mum or dad or close family member, and they could just as easily be your mum or dad.

You would want them to be treated with understanding and sympathy, not misled or upset.

Dealing with financial matters can be difficult at the best of times, but can be terribly hard when you are in a vulnerable state, such as when a parent dies.

One thing clear from the research is that when vulnerable people approach financial companies, they hope for a positive and helpful response.

When they do not get that, their situation – whether financial or mental – is likely to be made worse.

That happened to ‘John’, age 71, who lived with his dad after a failed marriage and a partner who died of cancer. When his dad died he popped to the bank to sort things out.

At first he was virtually accused of being a criminal because there were withdrawals from his dad’s account after the date of his death.

They had in fact been payments his dad had made a couple of days before his death that had only shown up on the account afterwards.

But you can imagine how that made John feel: confused and upset, I would imagine. He was then sent away to find his mum’s death certificate because her name was still on the account, but when he returned to the bank a few days later there had been a few more payments, so that it was now £700 in the red.

He was then falsely told that he would have to repay the money, upsetting and worrying him even more.

The complete lack of empathy and understanding is appalling.

The FCA has set out a marker that it will “step in” if it discovers financial companies are not treating vulnerable people fairly. But that does not just mean not ripping them off, it means making greater efforts to help them because of their situation.

During the coronavirus crisis, many more people have become vulnerable, which means everyone in financial services must make greater efforts to understand and help.

Simon Read is a freelance journalist