The FCA published an orientation guide on how to treat vulnerable clients.

According to the FCA, companies must deal fairly with all customers, especially those who have special conditions.

The FCA has published guidance on how companies should treat vulnerable customers.

In a PDF titled ‘A Guide for Businesses on Fair Treatment of Vulnerable Clients’, the regulator said senior leaders should create and uphold a culture to prioritize fair treatment of vulnerable clients.

Business staff needs to understand that people with mental health problems are more likely to go into debt, which in turn can make their mental health worse. In the meantime, they need to know how perpetrators of domestic abuse can use financial services in their abuse and recognize how to safely help victims.

Companies need to ensure that staff focuses on understanding and responding to people’s needs, even if they are unusual. For example, if a consumer in default mentions that their mental health condition means that they find the opening letters distressing, companies should focus on how they can communicate using other channels.

The regulator said 27.7 million UK adults have characteristics of vulnerability, such as poor health, experiencing negative life events, low financial resilience, or low ability.

Vulnerable people may be at greater risk of improper sales because their ability to make decisions could be impaired.

“Protecting the most vulnerable consumers is essential.”

Nisha Arora, Director of Consumer and Retail Policy, said: “Protecting vulnerable consumers remains a key focus for us, and given the impact of the coronavirus pandemic, it is more important than ever that businesses get it right.”

“The guidance announced today will help ensure that vulnerable consumers are treated fairly and perform as well as other consumers.”

“While some firms have made significant progress, we want all firms in all sectors to take steps to understand and respond to the needs of their clients, particularly those who are most vulnerable to harm.”

“We also remind clients to tell their providers if they have specific needs, be it due to health issues that make it difficult to access a service or a recent emotional or financial shock that is affecting their finances. Doing this will help companies back it up.”

Research from later life mortgage lenders more2life found that 39% of counselors have seen an increase in their clients’ vulnerabilities in the past 12 months.

What’s more, four out of five (81%) counselors would like to see more education and resources to help them identify whether clients are vulnerable.

Dave Harris, CEO of more2life, said: “When working with older clients, share release advisers are acutely aware of how important it is to provide adequate support to vulnerable clients. We welcome today’s guidance from the Financial Conduct Authority as it further solidifies the need to ensure that advice is personalized, appropriate, and designed to help vulnerable clients make the right decisions for their individual circumstances.”

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