The document states: “We expect leaders in firms to manage the drivers of behaviour in their firms to create and maintain cultures which reduce the potential for harm, particularly with respect to vulnerable consumers.
“This means that when interpreting what this guidance means for a firm, it should ensure this applies across the whole organisation, starting at the leadership of the organisation and permeating across the firm so that doing the right thing is the responsibility all staff.”
The FCA paper asks all regulated organisations to examine how they acquire leads, and make sure they are taking account of how vulnerable people may respond differently.
Companies may need to examine if – based on the fact that they are targeting a portion of the population that is likely to be exposed to a vulnerability such as indebtedness – they need to put more safeguards in place to make sure consumers are not making decisions in haste against their long-term interests, while in a temporary position of vulnerability, for example.
Better safeguards might need to be put in place to identify vulnerable customers and categorise them according to the different types of vulnerability.
Then their customer journey can be adjusted to ensure better outcomes.
Just Group’s ‘Dealing with vulnerable customers – the industry’s response’, which was published ahead of its Annual Leaders’ Summit held in February 2019, offers some great insight into how far the industry has gone to address the issues of treating vulnerable customers fairly.
This report shows that identifying vulnerability early in any process is a critical success factor. Systems are being developed and improved to help:
- Recognise vulnerable customers earlier;
- Record types of vulnerability and actions taken to support them better;
- Respond better to vulnerable customers;
- Report on progress with treating vulnerable customers fairly.
However, it is still rare for companies to have dedicated budgets for vulnerability support. Only two firms (out of the 36 involved in the in-depth research that formed the basis of this study) said they had dedicated budgets in place.
There was patchy and inconsistent ‘coding’ of vulnerability types, making it difficult to crunch and share data and come up with best practice for better supporting customers with different types of vulnerabilities.
This is an area that is crying out for regulatory leadership, as unless we have an accepted framework for classifying vulnerable customers, it will be impossible for a company to benchmark their data records against other firms that might be expected to have identified similar proportions of vulnerable customers.
Companies need to remember that all electronic data is disclosable, so they need to be ready to answer questions from customers as to whether they have applied a classification to them and, if so, which one.
Avoid giving offence
Sensitive naming of the categories is important here to avoid giving offence. Just over a quarter of firms in the scope of Just’s report have already fully embedded ‘treating vulnerable customers fairly’ processes into product and service design and delivery.
