Insights ¦ Vulnerability review Improving understanding of the outcomes for consumers in vulnerable circumstances when engaging with financial services firms

Key Take Aways

1. Customers in vulnerable circumstances, especially those with multiple vulnerabilities, are more prone to poor outcomes when engaging with financial services.

2. Disclosure of circumstances generally leads to better support and outcomes, but barriers such as lack of awareness and fear of negative repercussions persist.

3. Interaction of multiple vulnerability characteristics increases susceptibility to harm, with complex dynamics such as interaction, escalation, and cycles exacerbating risks.

4. Tailored, personal support fosters trust and improves outcomes, whereas standardised and impersonal approaches often lead to dissatisfaction and disengagement.

5. Effective communication channels and providing diverse options are essential, as vulnerable consumers value face-to-face over digital or automated methods, especially if they are digitally excluded or have health conditions.

6. Many consumers in vulnerable groups experience difficulty accessing suitable products, with higher rejection rates and less clarity about reasons for decline.

7. Barriers to disclosure, like stigma and fear, prevent vulnerable consumers from sharing their needs, ultimately limiting support and safeguarding.

8. Positive disclosure outcomes, such as feeling asked the right questions and receiving appropriate changes, are linked to improved trust.

9. Negative communication experiences, including unempathetic behaviour and poor service, have a disproportionate impact on mental health and trust in vulnerable consumers.

10. Trust is heavily influenced by whether consumers can talk to a real person, with face-to-face interactions significantly reinforcing confidence.

11. Consumers often hold mixed experiences with providers; positive interactions can bolster trust, but negative or inconsistent encounters may severely undermine confidence.

12. Early, proactive engagement and support tailored to individual circumstances can prevent cycles of harm and foster resilience among vulnerable consumers.

Key Statistics

• 4 in 10 consumers in vulnerable circumstances have disclosed their personal needs or circumstances to a financial services provider.

• Nearly 6 in 10 (58%) of consumers in vulnerable groups are unaware of available support measures for communication issues.

• 25% of consumers with characteristics of vulnerability reported being turned down for a suitable financial product, compared to 11% of non-vulnerable consumers.

• Approximately 50% of those turned down for a product had not received any explanation for the rejection.

• 74% of consumers who disclosed needs agreed their provider asked the right questions; 57% felt the provider cared.

• 25% of consumers in vulnerable circumstances reported worse trust in providers following poor communication experiences.

• Only 13–15% of consumers in vulnerable groups felt unable to get necessary information or act on their products, higher than the 6% of non-vulnerable consumers.

• 19% of uncomfortable disclosers cited fear of worse outcomes, embarrassment, or stigma as reasons for withholding information.

• 70% of consumers who faced communication issues felt providers offered adequate alternative channels.

• Consumers in vulnerable circumstances are more likely to experience complex, negative interactions which may trigger cycles of harm.

• Mixed communication experiences can both reinforce and erode trust, notably with consumers holding multiple vulnerabilities.

• Long-term trust is significantly driven by positive, consistent interactions and tailored support.

Key Discussion Points

• Understanding the interaction of multiple vulnerability characteristics is crucial for risk mitigation and improving consumer outcomes.

• Firms must recognise and address barriers to disclosure—such as stigma, embarrassment, and lack of trust—to facilitate better support.

• Personalised, flexible support notably increases trust and improves engagement, especially when delivered through channels that meet individual needs.

• Standardised or automated communication approaches often lead to consumer frustration and feelings of being neglected or misunderstood.

• Digital exclusion remains a significant barrier, increasing reliance on face-to-face support, which many consumers find most effective.

• Clear, proactive communication about reasons for product declines and available alternatives can mitigate harm and frustration.

• Consumers report that poor or unempathetic communication, particularly over the phone or online, damages trust more heavily among vulnerable groups.

• Disclosing needs leads to positive experiences only when supported with empathy, appropriate questions, and actionable responses.

• Negative communication or unacknowledged disclosures can deepen misunderstandings, damage relationships, and reinforce a cycle of harm.

• Building trust depends fundamentally on consistent, high-quality interactions over time—tailored to consumers’ evolving circumstances.

• Providers should embed early intervention strategies and support mechanisms to break cycles of vulnerability and foster resilience.

• A comprehensive approach blending accessible channels, tailored communication, and proactive engagement is essential for delivering good outcomes for vulnerable consumers.

Document Description

This article presents a comprehensive review of the FCA’s research into the experiences and outcomes of consumers in vulnerable circumstances when engaging with financial services firms. It explores how vulnerability characteristics interact, the importance of effective disclosures, communication channels, and tailored support. The review highlights real-world case studies and key findings, offering strategic insights into how firms can improve support, increase trust, and proactively mitigate harm through personalised, flexible approaches across multiple channels.