FCA Guidance for firms on the fair treatment of vulnerable customers
On 23 February 2021, the FCA finalised its guidance setting out its view on how firms should comply with their obligations under the FCA’s Principles for Businesses and ensure that they treat vulnerable customers fairly.
The FCA explains that to achieve good outcomes for vulnerable customers, firms should:
- understand the needs of their target market/customer base;
- make sure staff have the right skills and capability to recognise and respond to the needs of vulnerable customers;
- respond to customer needs throughout product design, flexible customer service provision and communications; and
- monitor and assess whether they are meeting and responding to the needs of customers with characteristics of vulnerability, and make improvements where this is not happening.
The FCA sets out relevant actions firms should take under each of these headings. The guidance applies to all firms where the Principles apply, regardless of sector. It applies to the supply of products or services to retail customers who are natural persons, even if a firm does not have a direct client relationship with the customer. Firms can expect to be asked to demonstrate how their business model, the actions they have taken and their culture ensures the fair treatment of all customers, including vulnerable customers.