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Financial Conduct Authority consults on fair treatment of vulnerable consumers

The FCA has announced a consultation on guidance for firms on the fair treatment of vulnerable consumers. This draft guidance sets out the FCA's view of what the FCA Principles require of firms to ensure that vulnerable consumers are consistently treated fairly by financial services providers. The FCA is seeking comments on the first stage of the consultation by 4 October 2019.

The draft guidance

The proposed guidance is set out in three sections:

  • Understanding the needs of vulnerble consumers;
  • Ensuring staff have the skills and capabilities needed;
  • Translating that understanding into taking practical action. 

The FCA's definition of what constitutes a vulnerable consumer is "someone who due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care".  A fuller exploration of this definition and the scale of consumer vulnerability is provided in the FCA's occasional paper on consumer vulnerability. The definition includes both consumers who are actually vulnerable and those who may be potentially vulnerable. Vulnerability is a key priority for the FCA as its previous work has shown that not all firms treat vulnerable consumers fairly and that vulnerable consumers face a significant risk of harm. 

Responding to the consultation

Comments on the first stage of the consultation should be sent by email or post by 4 October 2019, using the addresses set out in the document. 

Tagged In

Repossession, Affordability