FCA outlines vulnerable customer treatment rules

The Financial Conduct Authority has published final guidance (FG21/1) on what it expects from firms when dealing with vulnerable customers to ensure they enjoy the same level of outcomes as all others.

FCA research shows that 27.7 million adults in the UK have characteristics of vulnerability such as poor health, experiencing negative life events, low financial resilience or low capability.

The regulator said firms should understand what harms their customers are likely to be vulnerable to and ensure that customers in vulnerable circumstances can receive the same fair treatment and outcomes as other customers.

This understanding needs to be present through the whole customer journey from product design through to customer engagement and communications.

The FCA noted that firms can expect to be asked to demonstrate how their business model, the actions they have taken and their culture ensure the fair treatment of vulnerable customers.

Nisha Arora, director of consumer and retail policy at the FCA, said: “While some firms have made significant progress, we want to see all firms across sectors taking steps to understand and respond to the needs of their customers, particularly those who are most vulnerable to harm.”

She added: “Protecting vulnerable consumers remains a key focus for us and given the impact of the coronavirus pandemic, it is more important than ever that firms get this right. The guidance being announced today will help ensure vulnerable consumers are treated fairly and achieve outcomes as good as other consumers.”

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