Many consumers in vulnerable circumstances are potentially not receiving fair treatment from their financial services providers. Whilst there are many examples of good practice in some firms, some people find communicating with providers or accessing products very difficult.

Essentially they may find that they are unable to obtain a flexible, tailored service that meets their needs from firms.

The FCA want to help firms across the industry identify consumers in potentially vulnerable circumstances, and to attempt to describe what ‘good’ looks like in serving those customers.

Having a Vulnerable Customer Policy shows how you:

• to broaden understanding and stimulate interest and debate around vulnerability and
• to provide practical help and resources to firms in developing and implementing a vulnerability strategy

Why this matters
All consumer protection legislation is underpinned by using the notion of the average or typical consumer, and, ideally what that typical consumer might expect, understand or how this might provide certain behaviours. However, consumers in various vulnerable circumstances may be significantly less able or confident to represent their own interests, and are more likely to suffer poor outcomes and greater harm than the ‘average’ consumer. Regulators and firms need to ensure these consumers are also adequately protected.

Financial services across the country have become more important as consumers are expected to take greater responsibility for their financial wellbeing. Financial services, including credit, loan and payment systems are essential for full participation in today’s society and are a key gateway to other services like investment and pension planning; therefore it’s vitally important that these services and the customer support that goes along with them are designed in an inclusive and conscious, ethical way.

This is a particular challenge as services are increasingly offered remotely and online – which does not meet the needs of all customers.

Financial services need to be able to adapt to the changing circumstances that real life throws at people, rather than being designed for the mythical perfect customer who never experiences difficulty. Vulnerability can affect people’s interaction with any consumer market, but it is particularly challenging in the context of financial services due in part to the long-term nature of commitments, and the complexity of products and information.

Increasingly, policy-makers both in the UK and internationally are realising that a flexible approach is necessary to meet the needs of a diverse customer base. You need to have a distinct policy and specific procedures for your staff to follow, if they deal with retail clients.

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