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FCA sends ‘clear signal’ for firms to do more on vulnerability

The Financial Conduct Authority has today launched a consultation on proposed new guidance for firms on the fair treatment of vulnerable customers. The guidance follows the regulator’s Consumer Approach paper last year and decision not to change its definition of a vulnerable customer.

Joanna Elson OBE, chief executive of the Money Advice Trust and former Chair of the Financial Services Vulnerability Taskforce, said: “The FCA has sent a clear signal for firms to do more on vulnerability – rightly highlighting the significant progress that has been made by many firms, while also recognising that this progress has not been consistent across the financial services sector.

“In recent years many firms have expanded the breadth of their focus to the whole range of vulnerable circumstances, and demand for the Money Advice Trust’s vulnerability training has never been higher. At the same time, we know there is much more to do.

“We look forward to working with the FCA as it consults on this proposed new guidance, and with firms as they continue to grapple with this crucial agenda.”

Chris Fitch, vulnerability lead for the Money Advice Trust, said: “This proposed new guidance helpfully summarises the FCA’s expectations on firms – and its strong emphasis on areas such as product design and front-end customer services in broad terms, beyond debt collection alone, is particularly welcome.

“The planned cost-benefit analysis appears to suggest an attempt to incorporate an element of ‘commercial realism’ in the regulator’s future plans in this space. This will need take into account a wide range of input on what costs and benefits need to be included, and transparency will be key.

“While the consultation on this new guidance will take place over a long period, many of the challenges it identifies need addressing right now. My message to firms remains the same as when the FCA’s original vulnerability paper was launched in 2015 – do recognise the progress you have already made, but don’t let this delay the action that is clearly still needed.”

The Money Advice Trust has now provided vulnerability training to more than 19,000 staff working in more than 200 creditor organisations.

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