In a further review of how firms approach the treatment of customers in vulnerable circumstances that involve bereavement and Powers of Attorney (PoA), the FCA has looked at how banks and building societies deal with customers in these circumstances. This follows the November 2024 review of life insurers looking at the same circumstances, and many of the themes and findings are similar.
For insurance distributors, these findings are all relevant for them to consider should they find themselves dealing with their customers in circumstances involving bereavement and dealing with Powers of Attorney. The key is having individuals within the business who are empathetic to the situations and who are suitably trained to provide the right support.
- Although indicating that it has identified a real difference in some firms (post-Consumer Duty), with clear policies and procedures and actively using data to better identify needs and support their customers, the FCA has found that some firms’ staff are unclear on the actions they need to take and how quickly.
- In some cases, this meant some individuals and their representatives were unable to access funds to pay essential bills.
- There were examples of customers who struggled to get support during an emergency, such as a mental health crisis, adding to their distress.
- The report sets out examples of good practice and areas for improvement under four separate ‘findings’. Across the board, the examples of good practice involved firms having clear policies and procedures which were accessible, good systems and controls and training materials, good testing processes that are refined following review, and some MI in place.
- The areas for improvement also had a similar theme across the board – which was that there is generally a disconnect between the processes and procedures and systems and controls and training etc., and the actions of staff and performance of systems in customer-facing environments. Specific examples include:
- staff being unclear about what actions they should take and what support to provide in the event of an emergency;
- striking the right balance between safeguarding customers from fraud and the customers’ needs to continue undertaking basic banking requirements (in some cases, the FCA observed customers and their representatives experiencing extended periods where they were unable to access funds to pay essential bills);
- staff inconsistently using records, and failing to check or respond to support needs recorded on a customer’s profile;
- staff not acknowledging that customers were noticeably distressed and upset, failing to recognise and respond sensitively to a customer’s needs, or showing a general lack of empathy, all of which suggests that staff were unable to recognise potential support needs or lacked the training to help them to do so;
- MI not consistently giving a clear picture of customer outcomes, with firms relying on data that lacked breadth and detail, and a lack of clarity on what firms consider to be good and poor outcomes; and
- customers or their representatives having to repeat information when speaking to different staff members, or having their cases delayed or dropped altogether because they had been ‘lost’ in the firm’s systems, risking further distress and upset.
- Firms should perhaps concentrate on resource allocation, process output and continuous improvement.
- Firms should assess their current bereavement and PoA handling processes, identify gaps and implement necessary improvements, and engage with stakeholders to foster a culture of empathy and efficiency.