The regulator has put forward this guidance to generate consistency in the treatment of vulnerable customers 

The Financial Conduct Authority (FCA) has issued final guidance to make clear its expectations for firms on the fair treatment of vulnerable customers.

The regulator defined a vulnerable customer as “someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care”.

The definition and guidance is to ensure that firms have consistency on this matter, as the FCA will continue to hold firms accountable for the treatment of vulnerable customers - for example, firms may be asked to demonstrate how their business model, actions and culture will support them.

It reminded firms that in treating customers fairly, they should also be aware of their obligations under the Equality Act 2010 –  it is likely that a breach of this law would subsequently breach FCA rules.

Nisha Arora, the FCA’s director of consumer and retail policy, said: “Protecting vulnerable consumers remains a key focus for us and given the impact of the coronavirus pandemic, it is more important than ever that firms get this right.

”The guidance being announced today will help ensure vulnerable consumers are treated fairly and achieve outcomes as good as other consumers.

“While some firms have made significant progress, we want to see all firms across sectors taking steps to understand and respond to the needs of their customers, particularly those who are most vulnerable to harm.”

Memorandum of Understanding

The FCA’s recent Financial Lives research found that 27.7 million adults in the UK now have characteristics that are considered a vulnerability, such poor health or low financial resilience.

The regulator believes that firms should understand the vulnerabilities of customers so that they can better deliver fair treatment throughout the whole customer journey.

A Memorandum of Understanding (MoU) was also published by the FCA, together with the Equality and Human Rights Commission (EHRC).

This sets out how the FCA will cooperate and work with the EHRC on equalities issues, to help protect people in the financial services markets.

It will also support the FCA’s efforts as it seeks to eliminate discrimination and advance equality of opportunity in line with its obligations under the Public Sector Equality duty.

Arora added: “We also remind customers to tell your providers if you have specific needs – whether that’s due to ill health making it difficult to access a service, or a recent emotional or financial shock that is impacting your finances. Doing this will help firms support you.”


Meanwhile, the Association of British Insurers (ABI) welcomed the guidance.

A spokesperson for the ABI, said: “Insurers treat the identification and support of potentially vulnerable customers as a priority.

”It is also good to see a number of examples of best practice across the industry highlighted in the document, as well as recognition of the importance of support for frontline staff dealing with vulnerable customers.”