GC19/3 (23rd July 2019):
Guidance for firms on the fair treatment of vulnerable customers.
This is the FCA’s first consultation on draft guidance for firms on the fair treatment of vulnerable customers.
- The consultation is open until 4th October 2019. A second stage consultation with revised guidance will follow, with final guidance expected in 2020
- The expectations of firms are broadly aligned to those contained with the FCA’s 2015 Occasional Paper 8 and the existing Principle for Business albeit with greater focus on specific areas:
- ― Defining the skills and capability required by employees;
- ― Making practical and emotional support available to frontline employees;
- ― Proactively identifying when a firm holds information indicating a customer is vulnerable and/or warrants additional support;
- ― Recording vulnerability information in a way that is accessible by relevant employees;
- ― Providing post-contractual information to customers in a way they will understand.
- The essence of the guidance is to ensure the outcomes experienced by vulnerable customers is at least as good as the experiences of other consumers.
Quadrin Comment
This is the FCA’s first consultation on draft guidance for firms on the fair treatment of vulnerable customers.
- Firms face numerous challenges such as: the transient nature of vulnerability, risk of causing upset to customers and labelling them, customers not knowing they are vulnerable and/or, through good faith, unwilling or unable to know how and why to disclose their vulnerability and firms concern about contravening data protection requirements.
- Most firms have a documented customer vulnerability policy but the scope of these and how successfully they have been embedded varies from one firm to another.
- ― For example, few firms realisecustomers may be as vulnerable at the point of sale as customers may be during the course ofthe loan such as, partially sighted and/or hearingimpaired customers and.
- ― In many situations, realisingvulnerability is not lasting such that customers may recover, hence communication with customers should be encouraged and effectively managed.
- Quadrin welcomes further clarity on how firms should confront and manage these challenges.