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Are you doing enough to identify and protect vulnerable customers?

The Financial Conduct Authority (FCA) published its Portfolio letter for debt purchase, debt collection and debt administrator firms on the 18th January identifying drivers of harm and how firms should mitigate risks. It highlights the major concern that firms can fail to recognise and address the needs and challenges faced by vulnerable consumers. The Vulnerability Registration Service (VRS) is a tool that can help organisations identify vulnerable customers allowing them to determine how they can obtain the same fair outcomes as other consumers.

The FCA aims to publish its final Guidance on the fair treatment of vulnerable customers early this year and, subsequently, firms’ compliance in this area will be monitored. Are you prepared?

How can the Vulnerability Registration Service help?

We help debt purchase, debt collection, debt administrators and other financial services organisations to identify and help ensure the fair treatment of vulnerable customers. This helps to reduce the risk of regulatory fines, bad debt and reputational damage and also helps to protect the vulnerable customer from harm and further bad debt.

VRS is a simple data sharing model that enables firms to identify vulnerable customers and therefore allows them to be treated appropriately. We draw our information from self-registrations and people who have the authority to register someone else (e.g. Power of Attorney). We work with local authorities, solicitors and estate management companies source Court of Protection Orders where a lack of mental capacity means that an individual is not in a position to manage their own financial affairs.

The VRS is reciprocal and allows firms to provide us with information about their own vulnerable customers, where there is a legal basis to do so. This means that customers can also be treated fairly by other companies where they have a relationship, and companies can benefit from the information provided by third parties.

VRS gives the opportunity to share more detail about vulnerability through a flag system. The detail is provided consensually and shows where people are affected by severe financial difficulty, physical disability, mental capacity, lifestyle events such as bereavement or divorce. We also show where people have accessibility issues e.g. internet. We have introduced a flag so that people can highlight when they have been directly impacted by the pandemic.

Checking whether customers are in a vulnerable situation through VRS is simple and low-cost. It is relevant at key points in collections – at the point of default, prior to legal action and enforcement and when debt is passed to a debt collection agency and beyond.

Access to VRS is not technically onerous and does not incur significant development costs.

We deploy API technology and security and compliance are integral to the functionality of our service. We are also able to work with companies to batch run customer bases against the VRS to show any matches. Checking whether the people you are dealing with are registered as vulnerable on our database is an easy process. It is a tool to help identify vulnerable people that is readily available and enables you to take a proactive step to handling vulnerability responsibly.

For details of how you could work with the Vulnerability Registration Service to identify your vulnerable customers, help meet your obligations, and ensure fair treatment, please contact Helen Lord helen@vregservice.co.uk