Find out about our work on the fair treatment of vulnerable customers, including why vulnerability matters, how it affects your firm, and our guidance on supporting customers in vulnerable circumstances.
Video: Treating vulnerable customers fairly
Vulnerability guidance animation
Why vulnerability matters
Our Principles for Businesses[2] require firms to treat customers fairly, and we expect firms to exercise particular care with vulnerable consumers.
When consumers are in vulnerable circumstances, it may affect the way they engage with financial services. Vulnerable consumers may be significantly less able to represent their own interests, they may have different needs and may have more behavioural biases that negatively affect their decision making.
The effect of non-standard needs, together with behavioural biases, could be exacerbated by how firms behave.
Protecting the interests of consumers in vulnerable circumstances is a key focus for us. Our consumer priorities in the Business Plan for 2021/22[3] include outcomes to address the needs of consumers in vulnerable circumstances.
How this affects firms
We want vulnerable consumers to experience outcomes as good as those for other consumers, and receive consistently fair treatment across the firms and sectors we regulate.
To make sure this happens, firms in all sectors need to pay attention to the fair treatment of vulnerable consumers across all products and services.
Firms should be able to demonstrate how their business model, the actions they take, and their culture ensure the fair treatment of all customers.
Guidance for firms
In February 2021, following 2 consultations, we published finalised guidance on the fair treatment of vulnerable customers[4]. Our Guidance sets out the actions firms should take to treat vulnerable customers fairly. It also highlights examples of how they can put these actions into practice and includes case studies showing good and bad practice.
In July 2021, we then published responses to some of our most common questions from firms[5].
In June 2022, we published an update on the progress firms are making[6] to embed our Guidance. This update set out examples of firms taking positive action to understand and meet the needs of customers in vulnerable circumstances. It also set out the areas where we expect to see improvement and additional focus from firms.
Background and research
Ensuring vulnerable consumers are treated fairly has been a key focus of our policy since our Occasional Paper in 2015[7] which we followed with Our Approach to Consumers[8].
We have undertaken significant work to help firms understand the issues and act appropriately to ensure the fair treatment of vulnerable consumers.
Our policy development has been supported by our consumer research, including our Financial Lives Survey[9].
Find out more about the background to our approach to protecting vulnerable consumers below.
Next steps
The Vulnerability Guidance is issued under our Principles. It sets out our views of what firms should do to comply with the Principles, and to ensure the fair treatment of vulnerable consumers.
We supervise and enforce against the standards set by the Principles, as well as our rules, taking into account relevant guidance.
In our Mission, we are clear that understanding user needs, and recognising where some users may be vulnerable, is a key factor in the way we make regulatory judgements.
This finalised guidance will support us as we apply a ‘vulnerability lens’ to supervising and enforcing the standards set by our Principles and rules.
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 all customers, including vulnerable customers.
We will continue to monitor and evaluate the impact of the Guidance and how firms are embedding this throughout their businesses.
To get in touch, please contact us at [email protected]
