Firms' processes for vulnerable customers lacking

Despite the Consumer Duty and the regulator's regular publications on fair treatment of vulnerable customers, they continue to receive more detrimental outcomes in their dealings with financial services firms. Denis O'Connor discusses a recent FCA review that outlines good and poor practices.

Denis O'Connor is a fellow of both the Institute of Chartered Accountants in England & Wales and the Chartered Institute of Securities and Investment. He was a member of the British Bankers' Association Money Laundering Committee from 2003-10 and a member of the Joint Money Laundering Steering Group's board and editorial panel between 2010 and 2016. He has been a frequent speaker at industry conferences on financial crime issues, both in the United Kingdom and abroad.

The Financial Conduct Authority recently published their review (the Review) of how 725 firms treated vulnerable customers. [1] The Review considered whether those firms were following the FCA's 2021 Guidance on the treatment of vulnerable customers [2] and whether the Guidance should be updated in light of the Consumer Duty. While there were many examples of good practice, customers continue to report challenges, particularly where they had multiple characteristics of vulnerability. Accordingly, some firms are failing to comply with their Consumer Duty obligations. Helpfully, the Review provides many examples of good and poor practices that firms may elect to learn from.