Insights ¦ Guidance for firms on the fair treatment of vulnerable customers

Key Take Aways

• Understanding the needs of vulnerable consumers is fundamental to ensuring fair treatment across all stages of the customer journey.

• Firms are expected to embed the fair treatment of vulnerable customers as part of their organisational culture, with leadership creating an environment that prioritises reducing harm.

• Staff capabilities play a crucial role; relevant employees must recognise characteristics of vulnerability and respond appropriately, supported by tailored training and practical resources.

• Organisations need to implement continuous monitoring frameworks to evaluate outcomes for vulnerable consumers, including analysing complaints, feedback, and MI to identify gaps and areas for improvement.

• Product and service design should proactively consider potential impacts—both positive and negative—on vulnerable consumers, with an emphasis on inclusive and flexible design.

• Firms are encouraged to adopt adaptive processes throughout product development, testing, launch, and review to avoid inflexibility that could cause harm.

• Effective communication tailored to vulnerable consumers’ needs, including multiple channels and accessible formats, is essential to mitigate understanding barriers.

• Recognising and facilitating disclosures about needs is necessary—staff should be trained to listen actively and support consumers in sharing relevant information.

• Systems should enable seamless recording, sharing, and access to customer needs data, minimising the need for consumers to repeat information and ensuring tailored service delivery.

• Organisational culture must support flexible customer service models, allowing staff to adapt responses and implement appropriate support provisions without undue pressure to meet volume or speed metrics.

• Organisations handling data must consider GDPR and DPA 2018 principles, ensuring lawful processing, data minimisation, accuracy, and transparency, especially when managing special category data.

• Additional legal obligations, including the Equality Act 2010 and other sector-specific rules, reinforce firms’ responsibilities in treating vulnerable consumers fairly and making reasonable adjustments.

Key Statistics

• 46% of UK adults (24.1 million people) exhibited characteristics of vulnerability in February 2020, increasing to 53% by October 2020.

• Nearly 3 million people with disabilities have been turned down for insurance or faced additional charges (Extra Costs Commission).

• 1 in 5 UK adults (over 10 million) shared their PIN or account details with others in the last year, highlighting risks linked to scams and financial abuse.

• 17% of higher-risk credit card users believed they had no other acceptance options, illustrating vulnerability in product understanding.

• 20% of adults have given their credit/debit cards to others to use, exemplifying risks of financial abuse.

Key Discussion Points

• Embedding vulnerability considerations within the organisational culture is essential to delivering fair customer outcomes.

• Recognising various characteristics of vulnerability—including health, life events, resilience, and capability—helps firms tailor their approaches effectively.

• Staff training should extend beyond compliance; frontline employees need practical skills to detect signs of vulnerability and assess individual needs.

• Continuous outcome monitoring—including MI review and feedback loops—is critical for identifying and rectifying adverse trends for vulnerable consumers.

• Product design must proactively prevent harm, considering how features and complexity might exploit or disadvantage vulnerable users.

• Flexibility in processes—such as lending, claims handling, or communication channels—is necessary to accommodate fluctuating needs and avoid causing harm.

• Communications should be accessible, clear, and multisource, enabling vulnerable consumers to understand and manage their products confidently.

• Encouraging disclosures without forcing consumers to reveal their vulnerabilities can reduce harm and improve tailored service provision.

• Data management practices must comply with GDPR and DPA 2018, safeguarding personal and special category data, and ensuring lawful processing.

• Organisational support structures—including dedicated teams, vulnerability champions, and external partnerships—are vital for complex or high-risk cases.

• Organisations should adapt customer service models to include alternative channels, timely updates, and short-term support during crises.

• Sector-specific legal obligations supplement overarching principles, reinforcing the importance of reasonable adjustments and non-discriminatory practices.

Document Description

This article offers comprehensive guidance to firms on ensuring the fair treatment of vulnerable customers within financial services. It delineates responsibilities across understanding customer needs, staff capability, practical actions in product and service design, communication, and ongoing monitoring. The article underscores regulatory expectations grounded in the Principles for Businesses, emphasising organisational culture, effective data management, and legal compliance to minimise harm and deliver equitable outcomes for all consumers.