We’ve submitted a response to the FCA’s consultation on guidance for firms on the fair treatment of customers in vulnerable circumstances.
The draft guidance, which was updated following an initial consultation last year, intends to provide financial services firms with clarity on how they can improve the outcomes experienced by customers in vulnerable circumstances.
Our response sets out our strong support for the aims of the guidance and welcomes both the FCA’s clear focus on this issue and its commitment to driving forward this agenda at the same time as it responds to the huge challenges of the coronavirus pandemic.
We point to several areas where the guidance might improve customer outcomes further, including
- We emphasise the need for proactive supervision of firms by the FCA, as well as close engagement with firms, industry bodies and consumer organisations to ensure that firms’ vulnerability strategies are of consistent quality and provide good outcomes for customers. We encourage any steps that the FCA can take to make implementation of the guidance as simple as possible for firms
- We highlight the recent report on the social impact of affordable lender Fair for You, undertaken by the Centre for Responsible Credit and supported by Fair4All Finance. The report demonstrates the benefits that well-designed products, supportive policies and flexible processes can have on customers in vulnerable circumstances. We call for firms to adopt Fair for You’s approach to measuring impact on customers’ overall wellbeing, in order to test the effectiveness of their vulnerability policies
- We recommend that the FCA takes steps to promote greater transparency from firms around data on who they serve, vulnerability among their customer base and interventions taken in response. This would lead to greater accountability and would disseminate best practice, raising general standards across the sector and reducing the administrative burden of individual firms developing and implementing measures separately
