The FCA has recently set out new best practice guidance to help firms do more to protect vulnerable consumers.
The guidance consultation is available in full here: https://www.fca.org.uk/publication/guidance-consultation/gc20-03.pdf
This consultation follows the first phase of consultation (GC19/3), which took place in July 2019, and incorporates feedback from a range of bodies including consumer organisations, firms and trade bodies.
Who does this consultation apply to?
It will be of interest to:
- all FCA regulated firms to whom the Principles apply, and their appointed representatives
- industry groups and trade bodies
- consumer organisations and organisations that promote the interests of vulnerable consumers
- consumers and consumer advisers
Protecting vulnerable customers remains one of the FCA’s key priorities. Its 2020 Financial Lives survey highlighted that just under half of UK adults, aged 18 and over – 24.1 million people – display one or more of the characteristics of vulnerability. Vulnerability could be a result of an individual’s health (physical or mental), capability, resilience or the impact of a life event, such as bereavement or divorce.
The FCA expects that more consumers will be in vulnerable circumstances as a consequence of the coronavirus pandemic, due to issues such as job loss, ill health and bereavement. Where consumers are already vulnerable, the pandemic is likely to exacerbate this. Likewise, many individuals are expected to become newly vulnerable. More than ever, firms should be paying particular attention to the needs of vulnerable customers.
The new guidance “aims to provide a framework that allows all firms to accurately assess whether they are treating vulnerable consumers fairly, ensuring consistency across the financial services sector.”
As well as the proposed guidance, the FCA has also published research into the experiences of vulnerable customers. It covers four main themes for firms to consider, which are:
- Recognising vulnerability and understanding customers’ needs
- The value of sympathy
- The importance of empowered and knowledgeable staff
- Meeting vulnerable consumers’ communication needs
Go here to read it in full: https://www.fca.org.uk/publication/research/financial-lives-experiences-of-vulnerable-consumers.pdf
The FCA has asked for comments on this consultation by 30 September 2020.
They can be submitted via an online form or by email to firstname.lastname@example.org.
Finalised guidance is expected either later in 2020 or in early 2021.