Supporting customers in vulnerable situations

People come to us when they think a financial business should have done more to help or support them during a difficult time and they think a business:

• could have done more to help, for example, when they informed their bank or mortgage lender that they’d lost their job, were seriously ill, or were suffering a bereavement
• put them in a difficult situation, for example, by giving them a loan or credit when their circumstances prevented them from fully understanding what they were agreeing to
• did something wrong, which made things worse or added to their distress, such as continuing to send letters to a family member who had passed away after being informed of their death
• should have made adjustments rather than sticking to a standard process, for example, by allowing them to complete an application over the phone rather than in person where they had mobility issues.

The FCA defines a vulnerable customer as “someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care”.

See the FCA’s guidance on the fair treatment of vulnerable customers.

Vulnerability can be triggered by or one or more of the following:

• health conditions or illnesses that affect someone's ability to carry out day-to-day tasks
• life events like bereavement, job loss, or a divorce or relationship breakdown
• being less able to bear financial or emotional shocks
• having less knowledge of financial matters, lower confidence in managing money or low capability in other relevant areas like literacy or digital skills.

These characteristics can affect how customers make financial decisions and may put them at greater risk of mis-selling. So, it's important that your financial business:

• understands the harms your customers might be vulnerable to, and
• proactively asks questions that might help you to identify vulnerabilities.

See Section PRIN 2A.7.4 of the FCA Handbook.

The Consumer Duty requires financial businesses to consider the needs, characteristics and objectives of their customers – including those with characteristics of vulnerability – at every stage of the customer journey.

Where a customer is in vulnerable circumstances, it’s important that you ensure they get the same fair treatment and outcomes as other customers.

Good complaint handling can repair a relationship, help build trust and confidence in financial services, and give customers a better understanding of your financial products.

To help you handle a complaint well, please consider:

• working out what the customer’s communication needs are and making sure you’re meeting them
• creating safe spaces for customers to share information
• taking time to listen to, and understand, the customer and asking them how what happened affected them
• keeping an open mind and not making assumptions
• thinking about solutions rather than focusing on the usual process or system limitations
• making sure you address the customer’s points
• being transparent.

It’s worth noting that your customer might not be comfortable with the term ‘vulnerable’ or recognise themselves as vulnerable. So you may need to be sensitive to that.

Before we get involved

We only look at complaints you've had an opportunity to look into first. If your customer is unhappy with your response – or you don't respond to them within the time limits – they can come to us. 

We’ll look at the facts and evidence from both you and your customer. Your complaint handling teams should fully understand and be aware of the information we need from financial businesses tool.

We may ask additional questions, or for specific information. Each case is different, so what we require will vary. What we consider will usually include:

• relevant laws and regulations, including the Consumer Duty where it applies
• guidance, standards and codes of practice in place at the time of the event
• whether you were aware – or ought to have been aware – that your customer was vulnerable, and
• what support you offered or put in place, and whether you reviewed this regularly.

We follow the FCA’s dispute resolution rules (DISP) and will take into account how you’ve tried to resolve the problem. 

If we uphold a complaint, we'll tell you what you need to do to put things right. The details of this will depend on the nature of the complaint but, for example, we might ask you to:

• make changes to a product or account
• pay compensation for financial loss
• make changes to a credit file, or
• do things differently for this customer in future.

We may also ask you to compensate the consumer for any distress or inconvenience they’ve experienced as a result of the problem.

How we handle complaints

Businesses and consumer advisers can contact our Business Support Hub on 020 7964 1400 for information on how we might look at a particular complaint, or for guidance on our rules and how we work.

We also work with businesses and other organisations to help prevent complaints.