Vulnerability is not binary, and why this matters
This paper looks at why vulnerability is not a binary issue, and what firms can do to more adequately meet the needs of the FCA’s Consumer Duty regulations, provide their business with the right management information – and serve their customers in the most ethical way.
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As firms have begun to get to grips with dealing with vulnerable customers, their systems have needed to follow suit. It’s not uncommon for forms to have added a ‘flag’ to their consumer database, with a yes/no for ‘vulnerable’ or ‘not vulnerable’. The reality is that vulnerability is not binary – which means that this is a wholly inadequate way of meeting the requirements of Consumer Duty regulations and nor will it provide the business with the information it needs to properly support its customers.
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Understanding the implications of vulnerability within Consumer Duty
Our latest Consumer Duty white paper
This paper examines the FCA Handbook Rules on Consumer Duty Regulations, specifically Principle 12. We extracted some key rules in order to explain the practical implications.
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What is a vulnerability?
Our latest Consumer Duty podcast
There is still a great deal of uncertainty about how someone is defined as vulnerable; what a vulnerability is. The FCA’s data (confirmed with live data from MorganAsh’s vulnerable consumer management tool, MARS) shows that around half of all people can be defined as vulnerable. Yet others say that they have only a few per cent of vulnerable consumers. Can this be true? Andrew Gething and Johnny Timpson OBE try to dig into the answers.
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Managing vulnerability in consumer credit
Our latest Consumer Duty webinar
The FCA has announced that it is reviewing how vulnerability is being managed. What are the practical implications for consumer credit, particularly in the motor finance sector, where credit is so important? We look at: what does consumer vulnerability look like, and what is required under Consumer Duty in consumer credit? We talk about the elephant in the room – the sale – the conflict of assessing consumers and minimising friction in the sale. And we ask what are the costs, benefits and risks of assessing consumer vulnerability? We also look at: personalisation of communications, comparisons of buying journeys, what the motor finance sector ‘doesn’t know’ about other areas of financial services – and we talk about the FCA’s current thinking and offer insights into what’s coming down the line from the regulator.