At the end of February, the FCA issued one of its Occasional Papers, this time on the subject of vulnerable customers.
A very interesting subject this. And the paper (together with its associated documents) really sheds some new light on what a lot of us would consider to be vulnerability.
Vulnerability comes in a number of guises. People can be vulnerable for a limited period of time, for example, if they’re experiencing bereavement or redundancy. Or it could be a more permanent issue, for instance, if someone has a disability.
It’s easy to think of vulnerability as something that just affects those people in the latter camp.
But this study by the FCA is designed to point out to firms that they really need to understand what vulnerability means, and how they can position themselves to help vulnerable customers as much as they can. And in particular, not to put up barriers to those customers dealing with a firm.
There were a few examples set out in the study, but one which leapt out at me was the case of the registered blind person who was asked to produce ID to access money from his account, as his cards had been blocked due to suspected fraud. He was told that his blind person’s bus pass with a photo on it was not enough.
Another one was where an elderly lady, having recently changed banks, was refused an arrangement where her credit card bill could be paid over the counter at her local branch. It was difficult for her to set up an alternative arrangement, and by the time she had, she incurred a late payment charge.
The key point with both of these examples is that yes, firms have procedures that they need to follow, and yes they need to make sure their risks are contained (particularly financial crime ones). But in those cases where someone is genuinely vulnerable and struggling, is it right for the firm not to apply any leeway in these sensitive circumstances? The FCA believes not, and is urging firms to consider this issue more closely.
What’s to be done?
So, what can firms do to help those customers who are vulnerable for one reason or another? Here are some ideas to consider:
1. Do you need a policy on vulnerable customers?
Effective communications within a firm start at the top, and whilst many will have requirements to bring them into line with legislation, such as the Disability Discrimination Act, is there a need for something a bit wider that helps everyone in the firm understand how vulnerable customers are to be treated?
2. Do you need specialist teams?
For some firms, the nature of their operations is such that it’s appropriate to set up a specialist team to consider the needs of the vulnerable. For example, consideration of cases where someone is looking to open an account, but doesn’t have the right paperwork. Or someone who is trying to make an insurance claim but is struggling to get the relevant documents together. Specialist teams can help take the pressure off the front line service teams and act as a centre of excellence for dealing with such customers.
3. Does everyone know what vulnerability is?
It may be that for your firm, specific training is required to inform and educate all staff about vulnerability and what this is. The training could stem from your policy as a starting point, for example. For many this training could need to be structured as something which goes deeper into the subject of vulnerability, designed to promote greater understanding. After all, people will most likely understand disability, but there are a lot of facets to vulnerability as this paper from the FCA proves.
4. Does everyone know how to identify vulnerability?
This is perhaps the toughest one but one where the FCA is looking to rise to the challenge. Identifying if someone has a vulnerability is arguably easier to do if the person is standing in front of you, but on the phone, it’s a much more difficult matter.
Often, the indicators of vulnerability can be quite subtle. For example, someone who appears to be struggling and mentions in passing in a sentence that they haven’t taken their pills that morning. Or someone who appears short of breath down the phone and appears to be getting stressed in trying to either put their point across or to deal with the firm’s request.
The difficult judgement call to make here is how to spot customers in difficulties and then what degree of extra help is needed to get their issue dealt with satisfactorily.
For some, this judgement call may be deemed to be something reserved for a specialist team (as mentioned above), or it may be that front line servicing teams can be equipped to deal with such customers as a matter of course.
There’s one thing common to all of this
And that’s the extent to which people in firms are trained to be able to deal with vulnerable customers. In fact, it’s explicitly mentioned in the study as one of the key areas that firms need to look at.
Training requirements can take on many forms, depending on the type of firm. It may be that a specialist team needs bespoke training on vulnerability. Or that people in customer care teams need to be trained to be able to handle such calls in a sensitive manner.
In addition, there may well be a need for training for managers and supervisors, so that they are able to identify development needs themselves amongst staff and address the accordingly.
Either way, the “softer” communication skills that people working in our industry need to be able to demonstrate will become more of a focus for training in future.
And as for every other training need, start your search with Industry Events Online.
By Martyn Oughton a Professional Member of the International Compliance Association (ICA). Martyn now writes a regular blog for Industry Events Online focusing on the importance of training in all aspects of compliance. Read Martyn's other publications at Martyn's Writers' Residence website.
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