Just 4-in-10 vulnerable customers say they have disclosed their
needs to their financial services provider, new research from the
Financial Conduct Authority (FCA) shows.
However, those that do open up tend to have better experiences.
Three quarters of vulnerable customers who told their firm about
their circumstances (74%) said that staff asked the right
questions to understand their situation, 6 in 10 (57%) said their
firm ‘cared', and (58%) said their firm took action to provide
support they needed.
Anyone can become vulnerable due to health, life events, ability
to withstand financial or emotional shocks, or because of poor
financial or digital literacy.
The research finds that vulnerable customers are more likely to
report a negative experience with financial services firms, such
as their bank or insurer, when compared to non-vulnerable
customers.
The FCA issued guidance to help financial services firms support
consumers in vulnerable circumstances in 2021 and introduced the
Consumer Duty in 2023, which requires firms to deliver good
outcomes for all customers, including those in vulnerable
circumstances. The FCA has today published a review and good and
poor practice examples to further help firms provide the right
care consistent with the Consumer Duty.
Sarah Pritchard, Executive Director, Competition, Markets
and International said:
“It can be hard to tell your bank or insurer about your specific
needs but those who ask for help tend to feel more supported.
We've seen good examples where financial firms are making a
difference for vulnerable customers, but we know that vulnerable
people report more negative experiences than others.
“We want firms to build on the good work identified, to help
people open up and make sure they get the support they may need.”
Case Studies
Mailk's anxiety
Malik suffers from anxiety and often finds himself severely
overwhelmed. Nine months ago, his rent increased, and he
panicked.
He phoned his bank about his rent increase, and told them about
his anxiety. His bank offered regular phone calls to check in and
offer support.
Malik is now more confident about his finances and trusts his
bank more. He particularly likes how it is the same person who
calls him every time. It feels like someone is looking out for
him, and he does not have to explain his circumstances.
Rebecca's hearing
Rebecca wears a hearing aid which connects to Bluetooth. She
normally has no issues talking on the phone, but during one call
with her bank her hearing aid temporarily glitched and the call
dropped. She explained this to the call handler.
Her bank now proactively sends email summaries of phone calls.
She found the change helpful and appreciated the positive steps
her bank took without her having to ask.
Nathan's meetings
Nathan has cystic fibrosis, which limits how much he can work.
He approached his bank to discuss his overdraft.
His bank invited him for regular in-branch meetings to discuss
his finances and offer advice. Nathan felt comfortable enough to
disclose his cystic fibrosis to them.
His financial situation has since improved, and he has begun to
save regularly. Nathan trusts his bank much more now.
Notes to Editors
1. An embargoed copy of the Vulnerability review and/or Consumer
Research are available on request. Please contact
sam.haidar@fca.org.uk and samantha.prince@fca.org.uk.
2. Key findings include:
- 44pc of vulnerable customers reported a negative experience
with a financial services firms compared to 33pc of
non-vulnerable customers.
- 42% say they have disclosed personal circumstances to firms:
- 19% were encouraged to do so by the firm
- 22% felt it was necessary given their circumstances
- A quarter (25%) of those in vulnerable circumstances said
they feel uncomfortable explaining their situation to a financial
services provider.
- Reasons for not disclosing personal situations include:
- Embarrassed 37%
- Don't want to be treated differently 24%
- Worried may get a worse deal 23%
- Didn't know my firm would help 19%
- I have security concerns 16%
- My circumstances have no impact on my financial affairs
16%
- It's not relevant 11%
3. Find out more information about the FCA here.
