The Financial Conduct Authority has promised to take action against firms which do not treat vulnerable customers fairly as it launched guidance on the issue.
Earlier today (July 23) the regulator published a consultation on introducing further guidance to help firms support vulnerable customers, something which has been long-awaited by the industry.
The FCA said whilst many companies had made "significant progress" in how they treat vulnerable consumers, there were still cases where firms clearly failed to consider the needs of these customers.
Where this was the case, and where firms failed to improve standards for vulnerable customers despite further guidance from the regulator, the FCA said it would take action.
The FCA said: "We plan to monitor how firms use the finalised guidance and the effect on outcomes for vulnerable consumers.
"We want to see firms explicitly embed the fair treatment of vulnerable consumers into their culture. We want to see standards improve across the sectors we regulate and we want vulnerable consumers to have greater consistency in the outcomes they experience."
The regulator said the guidance would also be used as a tool for its supervisors when assessing how firms treat vulnerable customers, and companies will be expected to "consider the relevance of the guidance for their firm" and take action by "improving existing, or implementing new, practices and processes".
In its consultation the FCA confirmed firms in the industry had sought greater clarity from the regulator on what they needed to do to ensure the fair treatment of vulnerable consumers, stating it believed half of UK adults displayed one or more characteristics of being potentially vulnerable.
The City-watchdog said it had already taken action where it found vulnerable customers were not being treated fairly or consistently across the financial services sector.
Christopher Woolard, executive director of strategy and competition at the FCA, said: "Protecting vulnerable consumers is a key priority for the FCA and we want to see firms explicitly embedding the fair treatment of vulnerable consumers into their culture."
The guidance will be consulted on in two stages and the FCA is asking for comments on the first stage of the consultation by October 4, 2019.
Stephen Lowe, communications director at Just Group, said: "We are pleased to see the regulator pushing on with its vulnerability work and continuing its dialogue with the industry on how best to strengthen consumer protection.
"This consultation will provide key evidence in the debate about whether vulnerability is best addressed within the current regulatory framework – by revising the FCA’s Principles and how they are supervised and enforced – or if primary legislation is needed to sit higher up, perhaps enforcing a statutory duty of care."
Mr Lowe said his company’s own research had shown 94 per cent of intermediaries claimed to be treating the issue of vulnerable customers seriously, but admitted organisations were at “very different stages” of their approach.