The Money and Pensions Service (MAPS), the single financial guidance body set up by the Government, has become the latest organisation to respond to the Financial Conduct Authority (FCA) vulnerable customers consultation.

MAPS begins its response by acknowledging more needs to be done to protect vulnerable customers than is the case at the moment, commenting:

“We agree with the FCA that firms need to go further to ensure that customers in vulnerable circumstances achieve similar outcomes to others, and that they are treated fairly in relation to purchasing products and services, and we welcome the FCA’s work to support firms to do more.”

It later described the existing FCA document as “not likely to achieve a step change” in treatment of vulnerable customers.

The Service makes reference to other FCA proposals to impose a new formal duty of care requirement and suggests this could deliver improved protection for vulnerable customers. While the regulator appears to have placed its duty of care initiative on hold at present, MAPS still says that the content of the duty of care document provides “greater clarity for firms on what ‘good’ looks like in serving customers in vulnerable circumstances and identifying how this runs through each stage of customer interaction.”

MAPS says it does not believe that the guidance emphasises sufficiently that senior managers have a duty to ensure the culture within firms enables them to effectively meet the needs of vulnerable customers.

The organisation then highlights that there is a danger too much emphasis could be placed on the obligations of customer-facing staff when looking at this issue. It is also vital, in MAPS’ view, that staff who design products, services and customer journeys fully understand the challenges and needs of vulnerable customers. MAPS goes on to recommend that firms should identify stages of the customer journey where the needs of vulnerable customers may not be satisfied at present.

The Service acknowledges that the FCA does not intend to create new detailed Handbook rules on the vulnerability issue. However, the response calls on the regulator to clarify the legal status of the proposals, especially regarding how the FCA can take enforcement action for breaches of the guidance.

MAPS specifically reminds firms and the FCA of two of the stated outcomes of the guidance:

  • Vulnerable customers should receive outcomes that are at least as good as those experienced by non-vulnerable customers
  • There needs to be consistency across different firms and sectors of the industry so vulnerable customers receive fair treatment regardless of the product they are buying/considering buying, or the nature of the financial service they are accessing

Another important issue the MAPS response covers is that it may not be sufficient for firms to use complaints data in assessing vulnerabilities in their customer base, as sometimes vulnerable customers may not complain as they find the idea of making a complaint too daunting.

MAPS suggests firms should have a ‘mission statement’ relating to its handling of vulnerable customers, and that information about the availability and nature of support resources should be given prominence in marketing materials and websites.

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