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The FCA describes a vulnerable consumer as somebody who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care. There are many reasons a person may be vulnerable. These may be related to health, capability, resilience, or the impact of a life event. The FCA expects firms to be doing the right thing for vulnerable consumers and embed this into their culture.

Service needs

Vulnerable customers are more likely to have a particular service need, for example they may require extra time to understand information helping them make decisions. The FCA is encouraging firms to consider the impact of their service on vulnerable customers.

The FCA expects customer services and systems to be in place that enable staff to respond flexibly to the needs of vulnerable customers and this can be especially challenging where processes are fully automated and communications are required to provide the necessary support.

Firm’s processes and systems should also help staff record and share information about vulnerable customers’ needs, so that customers do not have to repeat information and staff have the information to hand so they are well equipped to respond.

Firms should be aware of specialist support for vulnerable customers, either internally such as specialist teams, or externally such as charities or third-party access arrangements. They should ensure these are accessible and made known to all consumers, especially those that are identified as being vulnerable.

Interestingly, the latest FCA guidance for firms on the fair treatment of vulnerable customers introduces costs into the latest FCA guidance for the first time. The FCA estimate that implementing their guidance across financial services will cost £710m as a ‘one-off’ figure, and £450m in each following year. For the smallest firm, this could cost £3,200 and £2,400, and for the largest £3.3m and £2.4m.

This is where the Vulnerability Registration Service (VRS) can help. The VRS is a not-for-profit, low-cost service. The VRS is a register of identified vulnerable consumers.

Single reference point

The VRS provides consumers and firms that use the service with a single reference point to ensure that people who are looking to protect themselves against further debt or related financial problems do not need to have the same, often emotional, conversation with those many organisations with whom they have a touch point with.

The organisations that use our service will be alerted to someone’s situation needs, which should be considered whether they are contacting them for the first time or where they have an existing relationship with them.
The VRS has recently added a number of sub-flags, drivers of vulnerability, that help to identify a consumers vulnerability, clearly and quickly to staff, thus alerting them to a customer who may require help and ensuring the appropriate team can make the right approach.

In summary, The VRS can help your firm to identify vulnerable consumers and provide enough information, so that your staff can make the right approach. The VRS flag system will visually alert your staff members, informing them that a customer has a vulnerability. The VRS sub flags will provide enough information for the customer to be placed with the right team.

The VRS would be delighted to discuss any opportunities to provide its’ service to your organisation, so please do get in touch.