The Money Advice Trust has become the latest organisation to respond to the FCA vulnerability consultation.
The response starts by describing the FCA focus on vulnerability as a “crucial agenda”. The Trust asks the FCA to:
- Publish a guidance document on the issue of firms’ vulnerability obligations, made up of extracts from various areas of its Handbook. This guide should include a list of reasons why customers may be vulnerable. It should also provide details of the customer outcomes the FCA expects to see
- Explain how SM&CR will link to its work on vulnerability
- Provide greater clarity on what is practically expected from firms in terms of behaviours and outcomes
- Adopt a mission statement worded along the lines of: “firms should always work to identify, understand, and respond to what detriment consumers are ‘vulnerable to’”
- Provide more guidance as to how firms should treat customers with mental health issues
- Provide more guidance on how firms should comply with the Equality Act 2010, which covers how firms should act when they are aware, or have reason to suspect, that a customer is disabled in some way
- Provide more guidance on how firms can record information about a customer’s vulnerability without breaching data protection law. Recording information about vulnerabilities can save customers having to explain their issues all over again just because they are speaking to a different member of staff.
- Explain how it defines a ‘customer outcome’ as the Trust says it has seen examples of firms adopting their own interpretations, including some who regard a ‘positive outcome’ as being the same as providing good customer service
- Assist firms to identify what form of detriment a customer with a particular issue could be exposed to. For example, if a firm knows a customer lacks mental capacity, what specific detriment could be suffered by that individual, and how could the firm mitigate these risks?
- Emphasise to firms that they need to provide bespoke vulnerability training to their staff. The Trust says this training must provide details of how the firm’s regulatory obligations relate to the everyday situations, contexts, and tasks that staff experience. Going further, the Trust asks the FCA to stress to firms that simply asking a training provider to deliver an ‘off the shelf’ generic training course to their staff might not be sufficient
The Trust’s consultation response also asks firms to consider that some customers might be both ‘potentially vulnerable’ and ‘actually vulnerable’ at the same time. For example, a customer who is ill might be ‘actually vulnerable’ as a direct result of their illness, and they may also be ‘potentially vulnerable’ if the illness leads to a loss of earnings in the near future. The Trust calls on the FCA to consider using the terms ‘at greater risk of future harm’ and ‘currently experiencing harm’ instead of ‘potentially vulnerable’ and ‘actually vulnerable’.
Finally, the Trust asks firms to ensure their staff are aware of the various external bodies that can assist with certain vulnerabilities. Examples might include charities, GPs, addiction management services, organisations like the Samaritans, and debt counsellors.
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