The FCA has announced publication of its final guidance on what it expects of firms in terms of treating vulnerable customers fairly.
In issuing this final guidance the regulator intends to drive improvements in how firms treat vulnerable consumers – so that these customers are consistently able to achieve outcomes as good as any other customer.
The FCA’s Financial Lives research recently found 27.7 million UK adults showing signs of vulnerability. These would include poor health, negative life events, and low financial resilience. Not all vulnerable individuals will suffer harm, but adversity can compromise a person’s ability to make sound decisions and/or increase their risk of having products or services mis-sold to them.
The FCA is stressing that firms should take steps to understand what harms their customers may be vulnerable to – and ensure those affected receive the same fair treatment and outcomes as other customers. The regulator stresses that this applies throughout the entire customer journey, from product design to customer engagement and communications.
FCA director of consumer and retail policy Nisha Arora said ‘Protecting vulnerable consumers remains a key focus for us, and, given the impact of Coronavirus, it is more important than ever that firms get this right. We want to see all firms taking steps to understand and respond to the needs of their customers, particularly those most vulnerable to harm.’
The FCA warns that it intends to hold firms to account on their treatment of vulnerable customers. Firms will be required to demonstrate how their business model, the actions they take, and their culture all ensure fair treatment for all customers – including vulnerable customers.
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