Money Advice Scotland Annual Conference & Exhibition 2016
Crieff Hydro, 2nd & 3rd June 2016
GFKL – Lowell
Vulnerable
Customers
&
Collections
Sara de Tute
02 June 2016
INTRODUCTION
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Vulnerability & Collections
Treating Customers Fairly
“Treating customers fairly (TCF) remains
central to our expectations of firms’ conduct,
that firms put the well-being of customers at
the heart of how they run their businesses.”
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Definitions of Vulnerability
Vulnerable Customers
The FCA considers a vulnerable
customer to be “someone who, due to
their personal circumstances, is
especially susceptible to
detriment…particularly when a firm is not
acting with appropriate levels of care.”
Consumer Focus – “People who cannot
choose or access essential products
and services which are suitable for their
needs or cannot do so without
disproportionate effort/cost/time.”
(Tackling consumer vulnerability – An action plan for
empowerment, Jonathan Stearn, March 2012)
Citizen Advice Bureau – “ … may be defined as
someone who is unable to access the product or
service they require, or for whom such access requires
a disproportionate level of effort, and that the lack of
access causes them to be disadvantaged.”
(Access for all – The importance of inclusive services, Citizens Advice,
March 2011)
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“Vulnerability is such a subjective term that it is hard to define. Indeed, most users of
consumer credit may be regarded as ‘vulnerable’ to some degree because of their financial
circumstance.”
(Consumer credit and consumers in vulnerable circumstances , FCA, April 2014)
• Customers need to be provided with the right advice to help them get
out of unmanageable debt
• Vulnerability can be long-term but can also be transient or dynamic
• It can be exacerbated by:
• A change in circumstances
Any one of us could
• High levels of accumulated debt
become vulnerable
• Behaviours, preferences and biases
at any time
• Advanced age
• Lack of knowledge of/confidence with financial products
• Mental health issues
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Current Practices
Current practices
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•
•
•
•
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Training all front line staff
Using TEXAS
Specialist teams with specialist training
Referral to advice agencies
Breathing space
Writing off accounts
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Incorporation into Process Build
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Recent Initiatives
Recent initiatives
• FCA Occasional paper No. 8
• FCA Practitioner’s Pack – example of good practice
• BBA Vulnerability Taskforce
• Improving Customer Outcomes in Vulnerable Circumstances
• FLA and UK Cards Association – research project
• Lending Standards Board – thematic review
• MALG – Best Practice in use of flags – for vulnerable customers
• Money and Mental Health Policy Institute
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Challenges
Challenges
• Can vulnerability really be defined?
• What makes someone vulnerable?
• How do we identify those customers who are particularly
susceptible
• No one-size fits all approach
• Consequences of getting it wrong
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Financial Abuse
Challenges
Financial Abuse is a way of controlling a
person’s ability to acquire, use & maintain their
own money & financial resources.
Taking out credit
and running up
debts in their
partner’s name
Forcing a partner to ask
for money, to account for
every penny
Making a partner
surrender control over
their bank accounts,
assets, wages, benefits
and other income
Using control of
finances to prevent a
partner from escaping
abuse
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Financial Abuse
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How do we Improve?
What can we do better?
•
•
•
•
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Special circumstances
Be flexible – don’t try and fit everyone into a defined term
Continually improve processes
Expand range of referral agencies
Work together
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Treating Customers Fairly
“Treating customers fairly (TCF)
remains central to our
expectations of firms’ conduct,
that firms put the well-being of
customers at the heart of how
they run their businesses.”
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Thank you!
Any questions?
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