The FCA has launched a consultation on proposed guidance for firms on the fair treatment of vulnerable customers.
The guidance sets out the regulator’s view of what the FCA Principles require of firms  to ensure that vulnerable consumers are consistently treated fairly across financial services sectors.

The FCA says it wants to see “doing the right thing for vulnerable consumers deeply embedded in firms’ culture”.

Firms will need to think about what the guidance means for their business and customers, and how they are understanding and addressing the needs of vulnerable customers.

The FCA says it is a priority to protect vulnerable consumers and that it has “been working extensively with stakeholders on this issue”.

The watchdog says that, whilst many firms have made “significant progress” in how they treat vulnerable consumers, it believes that there needs to be “more consistency across financial services sectors”.

In some cases, firms are clearly failing to consider the needs of vulnerable consumers, leading to harm, the FCA said.



Christopher Woolard, executive director of strategy and competition, said: “Protecting vulnerable consumers is a key priority for the FCA and we want to see firms explicitly embedding the fair treatment of vulnerable consumers into their culture.

“Where we find that firms are not doing enough to ensure that consumers are treated fairly, we will take action.

“Firms need to take particular care to ensure that vulnerable consumers are treated fairly as they may be more likely to experience harm.

“The guidance should drive improvements across the industry, improving outcomes for millions of vulnerable consumers.”

Tom Selby, senior analyst at AJ Bell, said: “There is a common misconception that vulnerability is just about older people or those suffering from diagnosed illnesses.

“The reality is every single person will, at some stage in their lives, be vulnerable to one degree or another.

“The death of a loved one, for example, can leave those left behind in an acutely vulnerable emotional state.

“New parents can suffer significant mental issues in the wake of childbirth, with some falling into deep depression.

“Mental illness can equally strike out of nowhere and last for days, weeks, months or even years, with suffering often kept secret even from close family and friends.

“Among older people, dementia is likely to become an increasingly significant area of potentially severe vulnerability, with Alzheimer’s UK anticipating the number of sufferers will rise to one million by 2025.

“The complex, deeply personal and often transient nature of vulnerability can make it difficult to spot and respond to.

“The FCA is therefore right to focus on ensuring appropriate responses to vulnerability are embedded in firms’ cultures.

“This is not a problem that can be solved through rule changes – instead appropriate responses need to be woven into the fabric of all financial services firms, including pension providers.

“Firms need to be constantly reviewing and updating their approaches, in line with industry best practice.

“By setting out positive case studies in its guidance the FCA has made an important contribution to this.”

The guidance will be consulted on in two stages and the FCA is asking for comments on this first stage of the consultation by 4 October.