FCA encourages vulnerable customers to open up to firms to get the right support

The FCA has published a web page, alongside its findings, report and research information, encouraging vulnerable customers to disclose vulnerability to financial services firms. The regulator also outlined key findings from a vulnerability review research paper compiled by Critical Research.

The regulator outlined headline findings from the vulnerability review, revealing that just 4 in 10 vulnerable customers said they have disclosed their needs to their financial services provider, and that 44% of customers in vulnerable circumstances reported a negative experience with a financial services firms compared to 33% of customers not in vulnerable circumstances.

Of the 42% that said that they have disclosed personal circumstances to firms, 19% said they were encouraged to do so by the firm, and 22% felt it was necessary given their circumstances. Meanwhile, a quarter (25%) of those in vulnerable circumstances said they feel uncomfortable explaining their situation to a financial services provider.

Those in vulnerable circumstances reported different reasons for not disclosing their personal situations, such as feeling embarrassed (37%), not wanting to be treated differently (24%), fearing they may get a worse deal (23%), not knowing their firm would help (19%), or concerns over security (16%).

Yet, research also revealed that customers who do open up are more likely to have better experiences. Three quarters of vulnerable customers disclosed their circumstances to firms (74%) reported that staff asked appropriate questions to understand their situation, 6 in 10 (57%) felt their firm ‘cared’, and 58% stated that the firm had acted to provide the support they needed.

As a result, whilst the FCA acknowledged it can be hard for individuals to divulge specific needs to a bank or an insurer, those who do are more likely to be able to access the right help and feel more supported.

The FCA has seen good examples where financial firms are making a difference for vulnerable customers but is aware that vulnerable people report more negative experiences than others. The FCA wants firms to build upon the good work identified to help people to open up and ensure they can get the support they may need.

In 2021, the regulator issued guidance to help financial services firms support consumers in vulnerable circumstances and introduced the Consumer Duty in 2023, requiring firms to deliver good outcomes for all customers, including those in vulnerable circumstances.

Alongside its web page and research into vulnerability, the FCA has also published a review, ‘Firms' treatment of customers in vulnerable circumstances’, and good practice and areas for improvement, ‘Delivering good outcomes for customers in vulnerable circumstances’, offering further guidance for firms on how to provide care that aligns with the Consumer Duty.

Sarah Pritchard, FCA executive director of competition, markets and international commented:

‘It can be hard to tell your bank or insurer about your specific needs, but those who ask for help tend to feel more supported. We’ve seen good examples where financial firms are making a difference for vulnerable customers, but we know that vulnerable people report more negative experiences than others.

’We want firms to build on the good work identified, to help people open up and make sure they get the support they may need.’