Background:
The Financial
Conduct Authority having assumed responsibility for supervision consumer credit
looking at greater emphasis for the need to protect consumers. The Office of Fair
Trading research paper 15 identified seven categories of vulnerable persons:
Those on low income,
The unemployed,
Those suffering from long term illness or
disability,
Those with a low level of education
attainment,
Members of ethnic minorities where English
is not their mother tongue
Older people,
The young.
When dealing
with any Customer or potential Customer who falls into one of the categories
associated with Customer vulnerability additional steps need to be taken by
Staff. Staff members must takes appropriate
precautions in the way that they sell and deliver services in order to ensure
that the Customer is not disadvantaged in any way.
Identifying a vulnerable Customer
A vulnerable Customer
is someone who, due to their personal circumstances is especially susceptible
to detriment when a firm is not acting with appropriate levels of care.
Vulnerability
may come in a variety of ways, it may be permanent, temporary or sporadic in
nature, many of those who are in a
vulnerable situation may not define themselves as such.
When meeting a Customer
face to face it may be apparent from body language and facial expressions to
identify whether the prospective Customer
requires additional information and guidance to enable them to make an informed
decision.
When speaking with Customers over the telephone it may be more difficult
to identify a Vulnerable Consumer because it is not possible to see body
language and facial expressions etc. It
is critically important to listen carefully to all customers and to identify
people who may be classed as a Vulnerable Consumer. The tone of the voice may give some clues. Typical
telephone characteristics may include:
Having to repeatedly explain a particular
aspect of the service – either because the Customer is hard of hearing or
simply does not understand what is being said.
Where the Customer provides an answer or
comment which is inconsistent with the telephone discussion or which indicate
they have not understood the information which has been provided.
Where the Customer admits that they do not
understand or that they require the assistance of somebody else in making a
decision.
When dealing with a Customer electronically (via email / SMS or other
Instant messaging facility) staff neither have the benefit of observing body
language etc nor the ability to pick up from the tome of the conversation any
potential areas for concern. Typical
characteristics here may include :
Incomplete or repetitive statements
/ questions or comments;
Having to repeatedly explain or clarify a particular aspect;
Steps to consider when engaging with a Vulnerable Consumer
It should be noted
that where someone is potentially regarded as vulnerable then this does not
automatically mean that our products and services are unsuitable for them. Once we believe that we may be engaging with
a Vulnerable Consumer we should immediately make a record of the same and
ensure we adhere to this policy.
When engaging
with a Vulnerable Consumer we should:
Provide ample opportunities for the customer
to ask questions about the information we have provided.
Ask if there is anybody with them who is
able to assist them.
Ask them that they have understood the
information that has been provided – do this repeatedly as appropriate.
Allow them a period of reflection before
completing the transaction – offer to contact on another day if appropriate.
Where a
member of staff thinks that the customer does not understand the service which
is being offered to them we must not proceed with the transaction. The Customer should be informed that we will
write to them with further information about the product or services they are
seeking.
Where
a Customer provides information which indicates that (s)he does or may have
some form of Vulnerability that may impact on his/her ability to make an
informed decision, this should not lead to them being automatically denied
access to the service being sought. The
Firm should review its processes to ensure that the Customer is treated fairly
and a positive outcome achieved for the Customer.
