21Aug

The Vulnerability Registration Service has revealed that more than two in five (41%) of vulnerable customers believe they have received poor treatment from a firm during the past 12 months. This covers consumers’ experiences across a wide range of firms, but financial services firms are most certainly responsible for much of the poor treatment.

Of those who consider themselves to be vulnerable, 18% have fallen into arrears during the past 12 months, while the same period has seen 14% of vulnerable adults take on additional debt as a direct result of their vulnerability.

The blog from the Service says that 17.7 million Britons (34% of the adult population) consider themselves to be vulnerable, although this figure was obtained from Office for National Statistics data from 2019, i.e. prior to the pandemic. More recent Financial Conduct Authority research has shown that the majority of UK adults are now ‘potentially vulnerable’.

The VRS also believes that 13.1 million (25% of adults) have experienced mental health difficulties during the previous 12 months, and poor mental health is most definitely one of the main drivers of vulnerability. The past year has also seen 8.8 million adults (17%, or one in six) affected by an adverse life event such as bereavement, job loss or divorce.

The FCA regularly speaks of the importance of firms identifying customer vulnerability quickly. The VRS survey, however, shows that 57% of vulnerable customers say they spent two weeks or more trying to communicate their specific personal circumstances to one or more firms. This rises to 71% amongst consumers with low levels of knowledge and confidence on financial matters and/or poor English language skills.

29% of vulnerable respondents said it was difficult to find the right person to talk to within the firm in order to access appropriate support. 37% reported having to repeat details of their vulnerability to multiple employees of the firm, even though firms should be keeping comprehensive records to ensure this does not occur.

However, one finding that may indicate firms face difficulties in this area is that 37% of all respondents indicated that they would be reluctant to disclose details of their vulnerability even if they were specifically asked about this.

The VRS maintains a register of people who describe themselves as vulnerable and who have contacted the Service to ask to be included on their Register. The hope is that firms will screen customers against the Register and respond accordingly once they identify a match.

Helen Lord, CEO of the Vulnerability Registration Service, said:

“These findings should act as a wake-up call. It simply isn’t good enough that so many vulnerable customers feel they are being unfairly treated. One in five (20%) vulnerable customers have continued to receive calls, emails or visits chasing up payments or for debt collection. This is unacceptable when you consider the fact that 31% of all the UK population have experienced some form of mental distress after being chased by organisations for missed payments or debt.

“Disclosing a vulnerability shouldn’t be so hard and the way an organisation responds shouldn’t be such a lottery. It is heartening that there are pockets of good practice but there now needs to be consistency across the board. Behind these statistics are vulnerable individuals who have already reached a limit on how much they can deal with. How is it that they are still being passed from pillar to post, having to explain their vulnerability time and time again or being chased for payments?

“This much is clear from our research – organisations must be more proactive. The only way to identify and protect the vulnerable from these experiences and further harm is to share data about them across sectors, and make checking for vulnerability a standard practice, like credit reference or affordability checks already are. The tools to make this happen already exist. If organisations truly are serious about treating vulnerable customers fairly, it is time to come together and move beyond words and guidance to action.”