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Vulnerable Customer Guidance

The number of vulnerable adults in the UK was estimated to have risen to almost 28 million by October 2020, in no small part due to the effects of the pandemic. Over a year on, and with increased pressure from rising prices, interest rates set to rise within the next six months, and the ongoing effects of coronavirus, this number is likely to have risen even further. In October 2020, as many as 25 per cent of adults expected that they would struggle to make ends meet and need to cut back on essentials or take on more debt.

Vulnerable Customer Guidance




Since the beginning of 2020, an increasing proportion of UK adults have experienced difficult life events – job loss or changes, bereavements, or negative life changes. Some will also find their ability to withstand financial or emotional shocks has decreased. But understanding which customers are affected, and how, is the first critical step in being able to provide these customers with an appropriate level of care.

Proactive support of vulnerable customers is important for a number of reasons, not least to comply with the FCA’s expectation of high levels of care for vulnerable customers. Assistance for those who are vulnerable could make a significant difference to the stability of the markets over the winter. Helping those who find themselves in difficult circumstances to find a path towards financial stability doesn’t just make a massive difference to each individual, but it can also ensure that firms remain stable.

Although the FCA has made its expectations clear, the fundamentals of support is a complex challenge for any firm. Frontline staff – undoubtedly – play a vitally important role in the identification of vulnerable customers, but to be able to ensure an effective process is in place, the first action within the FCA’s Vulnerable Customer Guidance is likely to be the foundation from which all other actions and strategies develop.

The Guidance says that firms should understand the nature and scale of vulnerability that exist in the target market and in the customer base, and then understand the impact of vulnerability on the needs of the consumers in each, the types of harm or disadvantage and how this might affect customer experience and outcomes.

Understanding the nature of the target market sounds more complex than it needs to be – the FCA recommend that firms consider using published information to understand the drivers of vulnerability in target markets, including FCA publications, and publications issued by charities, trade bodies and professional bodies.

The analysis of the firm’s customer base could be more tricky, depending on the data held. Many firms identify only whether a customer is vulnerable or not, and often hold only non-common free form text, detailing the customer’s circumstances, and sometimes their needs and any support option taken. This free-form element can make an analysis of the data more difficult.

Approaching the task with a clear set of questions in mind will aid the final analysis. As a first step, for example, it is important to understand how many customers are classed as vulnerable – not just currently, but which proportion of customers have been flagged, when and for how long. This broadening is likely to give a clearer picture of the customer base.

Qualitative analysis of any free form text can give a reasonable picture of the effect of vulnerabilities on the customer base. Keeping in mind that the aim is to understand how the effects of the types of vulnerabilities seen in the customer base affect the way that those customers engage with the firm, again, asking a broad set of questions can guide this analysis. For example, looking at customer data can shed light on whether customers with a certain set of vulnerabilities are potentially more susceptible to increased pre-occupation, or lower processing power, leading to poor buying decisions, or a poor understanding of potential consequences and of risks.

Whilst some categorisation is likely to be necessary during analysis, where this is done each category should be very clearly defined, particularly where more than a single individual is conducting analysis. It is vital to bear in mind that each individual is affected in different ways by different circumstances, and any resulting processes should offer enough flexibility to ensure that each customer receives support that is appropriate for their needs and circumstances.

Customer contact staff are a firm’s frontline in supporting vulnerable customers, and it is vital that they understand how to identify when a customer may be vulnerable. We offer a dedicated online training course on the fair treatment of vulnerable customers, updated for 2022. Priced at just £15 per user, the course is accessible at the delegate’s convenience and provides a certificate upon successful completion, allowing firms to track and record each user’s progress.

For large groups, we can offer a simplified enrolment service and pricing, simply email


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