A recent report has advised that nearly 30% of customers in the UK may now be classed as “vulnerable customers” following the Coronavirus (Covid-19). The FCA has mentioned that up to half of UK adults may be in the vulnerable category and the Regulator is focusing its attention on how firms deal with such customers. Here are some of the recent headlines:#
1. FCA set to take a keen interest in vulnerable customers
2. Drawing up a policy for vulnerable clients
3. Fca tells insurance providers to offer coronavirus payment holidays and refunds
So, what is a vulnerable customer?
A vulnerable customer is someone whose circumstances make them especially exposed to harm if your firm has not acted with appropriate levels of care.
When dealing with your customers, you will need to consider whether they are vulnerable if they have:
- Poor health,
- Financial, mental, or emotional challenges,
- Life events such as bereavement or relationship breakdown/divorce,
- Lack of language skills.
- Low knowledge of financial matters or low confidence in managing money
These are just a handful of examples, but the FCA will expect you to have things in place to treat such customers fairly.
How should you prepare?
Here are 5 steps you should take around vulnerable customers:
- Reviewing your vulnerable customer policy and procedures and making staff aware of these.
- Training your staff on what to look out for and how to respond.
- Keeping an eye on customer claims and complaints- you do not want your FOS numbers to go up.
- Act now to ensure you are not contributing to the detriment of vulnerable people through interactions, or negligence.
- Always ask yourself whether a product is still suitable for the client when assessing demands and needs.
Remember, if you don’t take steps, and complaints rise, the FOS may want to take a special interest in you.
If you are a subscriber to our compliance services, we will automatically add this to your register and review your policy and procedures to make sure these are sufficient.
