As an Appointed Representative (AR) of ACL, you are required to adhere to this document and adopt the policy statements it sets out, or to incorporate them into your own policy statements. To be used in conjunction with the ACL Vulnerable Customers Academy Module
Overview
On September 25th, 2020, the FCA set out new best practice guidance for firms to do more to protect vulnerable consumers:
“Today’s guidance sets out what firms should do to ensure vulnerable consumers are being treated fairly. We know many more customers will be struggling with their finances as a result of the impact of coronavirus. Supporting vulnerable consumers is a key focus for the FCA, and the recent coronavirus crisis has only highlighted its importance” (Christopher Woolard, interim Chief Executive at the FCA)
FCA Definition
“A vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to harm - particularly when a firm is not acting with appropriate levels of care” (FCA FG21/1 Updated February 2021)
Policy Guidelines: *
Ensuring consumers have an appropriate degree of protection is central to what the FCA does. This includes protecting vulnerable consumers.
“We want vulnerable consumers to experience outcomes as good as those for other consumers and receive consistently fair treatment. We have regard to the general principle that consumers should take responsibility for their choices and decisions.
However, there are very real factors that might limit their ability to do so, and characteristics of vulnerability may result in consumers having additional or different needs and may limit their ability or willingness to make decisions and choices or to represent their own interests.”
These consumers may be at greater risk of harm particularly if things go wrong.
The FCA expect firms to provide their customers with a level of care that is appropriate given the characteristics of the customers themselves.
ACL’s Vulnerable Customers policy is based on this paper and is designed to deliver both the purpose and spirit of this guidance.
Dealers should turn their understanding of vulnerable consumers in their target market or customer base into practical action to meet their needs (FCA FG21/1 4.1 Abridged)
Practical Actions include: *
A Dealership’s Vulnerable Customers Policy should be a consistent approach that is embedded across Departments.
Customer facing staff should be trained and be able to adapt their approach to deliver a service that meets the individual needs of vulnerable customers.
Clear, simple information and explanation throughout the lifetime of the product.
The FCA believes consumers in vulnerable circumstances need to trust that they will experience “What a customer’s “Good” looks like” *
Having financial products that are clear and easy to understand which are communicated in an easy-to-understand format (e.g., audio / braille / face-to-face) or the service delivery (e.g., agreement to talk at a particular time of day depending on carers and medication).
Customers need to be:
• Assured that if they should experience a sudden change in circumstances, they will be offered a flexible and tailored response from their financial services provider
• Be at ease taking to someone who will take the time to listen, and who is sufficiently trained to spot signs of vulnerability and refer on to specialists where necessary
• Feel confident that the Dealership will work with them looking after their best interests and that all personal information will be recorded properly so that they do not have to repeat it every time they interact with other departments
Summary:
This Policy comes under both the FCA “Principles for Businesses “and its “Consumer Duty” policies.
Firms must be able to provide ACL with examples of how they are achieving outcomes for consumers with characteristics of vulnerability that are as good as those for other consumers.
This will form part of our regular audits and proactive supervisory work.
*For more detail, please refer to the ACL Vulnerable Customers Academy Module.