Lenders urged to recognise vulnerable customers

LiveMore, whose customers are aged 50-90+ and arguably more vulnerable, is urging the industry to be extra vigilant in the current cost of living crisis, as arrears are up 7% to 81,900 borrowers in the second quarter of this year.

The Financial Conduct Authority defines 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.’

It is often the case that the customers themselves do not identify themselves as vulnerable, which is why LiveMore puts the onus within Customer Duty rules on the firms to recognise and act on vulnerability.

LiveMore’s customer base of 50-90+ year olds are more likely to be experiencing a health issue or the loss of a loved one. Equally, it is important to gauge people’s understanding of financial issues due to limited knowledge, ability with numbers or literacy or poor digital skills.

Leon Diamond, CEO and founder of LiveMore, said, “The introduction of Consumer Duty could not be timelier and as an industry we must all take the issue of vulnerability very seriously. More people are struggling financially, which can impact their mental health.

“Taking vulnerable customers into account at every stage of developing products and services, will help firms to meet their clients’ needs and avoid causing harm.

“It is also important to have robust processes in place to spot and respond to vulnerability, make customers aware of support available, and have systems to record and retrieve information about customer needs.

“Lenders and intermediaries have a clear role to play in making sure consumers, especially those with any vulnerability, have access to good advice and good outcomes.”