We have reviewed how firms are supporting customers in vulnerable circumstances and whether our existing guidance is still appropriate.
We may all find ourselves in vulnerable circumstances at some time in our lives. These circumstances can affect what we need and how we engage with our financial services provider, and make us more susceptible to harm.
In this context, we want firms to act to deliver good outcomes for customers in vulnerable circumstances. We recognise this can be complex.
Last year, we evaluated firms’ actions in line with FG21/1: 'Guidance for firms on the fair treatment of vulnerable customers[1]' (the Guidance). We did so to:
- Test how firms are supporting customers in vulnerable circumstances.
- Consider whether our existing vulnerability guidance remains appropriate in light of the Consumer Duty[2].
We found many examples of positive actions by firms across sectors, as well as some areas for improvement.
We also saw a renewed focus among firms on delivering good outcomes for consumers in vulnerable circumstances because of the Consumer Duty.
However, we know from the Financial Lives survey[3] and new consumer research[4] which we specially commissioned that consumers in vulnerable circumstances continue to report poor outcomes when compared with other consumers.
Although our research showed that consumers were able to report good examples of firms responding flexibly to meet their needs and offer tailored support, consumers continue to report challenges, particularly if they have multiple characteristics of vulnerability.
Given the complexity and evolving nature of vulnerability, we want to work with firms to continue driving improvements in practice and outcomes.
We want consumers to receive good outcomes, consistent with the Consumer Duty.
As part of our review, we spoke to stakeholders including firms, trade associations, consumer organisations and academics. They were clear that the Guidance remains useful and important under the Consumer Duty. On this basis, we are not revising our Guidance now or introducing new requirements for firms.
Rather, stakeholders suggested more case studies would help support firms.
We have therefore published case study examples of good practice and areas for improvement[5].
Our approach
As part of our review, we gathered data to understand:
- Actions firms have taken to understand and respond to the needs of customers in vulnerable circumstances.
- The outcomes experienced by customers in vulnerable circumstances.
- Stakeholders’ views of the Guidance, including its continuing relevance under the Consumer Duty.
Our findings
Next steps
We encourage firms to make use of our examples of good practice and areas for improvement[10].
To drive further improvements, we'll continue to take account of outcomes for customers in vulnerable circumstances across our Consumer Duty work with industry.
We will also continue to engage with industry to support continuous improvement, particularly in areas that firms find more challenging when supporting customers in vulnerable circumstances.
We will not be updating our Guidance for firms on the fair treatment of vulnerable customers, as we have concluded that it remains appropriate and helpful alongside the Consumer Duty, based on feedback from this review.
