Only 4 in 10 vulnerable customers disclose issues

The FCA wants more vulnerable customers to seek help as it emerged that just four in 10 vulnerable clients have disclosed their vulnerability to the regulated firms they deal with, it said this week. New FCA research found that only four in 10 vulnerable customers say they have disclosed their vulnerability to their financial services provider. Overall 44% of vulnerable customers, according to previous FCA research, have reported a negative experience with a financial services firm, compared to 33% of non-vulnerable customers. The regulator, which is publishing a good practice guide today to help improve engagement with vulnerable customers, said that those that do “open up” tend to have better experiences. More people should inform their provider or adviser that they may be struggling, the watchdog said. Evidence suggests that vulnerable clients who report their challenges get better service. Three quarters of vulnerable customers who informed their firm about their circumstances (74%) said that staff asked the right questions to understand their situation, 6 in 10 (57%) said their firm ‘cared’. Some 58% said their firm took action to provide support they needed. The watchdog said vulnerability can be caused by poor health, major life events, low ability to withstand financial or emotional shocks or poor financial or digital literacy. The research revealed that vulnerable customers were more likely to report a negative experience with financial services firms, such as their bank or insurer, when compared to non-vulnerable customers. Key findings from the FCA survey carried out in 2024: 44% of vulnerable customers reported a negative experience with a financial services firms compared to 33% of non-vulnerable customers A quarter (25%) of those in vulnerable circumstances said they felt “uncomfortable” explaining their situation to a financial services provider Key reasons for not disclosing personal situations included: Embarrassed 37%Don’t want to be treated differently 24%Worried may get a worse deal 23%Didn’t know my firm would help 19%I have security concerns 16%My circumstances have no impact on my financial affairs 16%It’s not relevant 11%The FCA issued guidance to help financial services firms support consumers in vulnerable circumstances in 2021 and introduced the Consumer Duty in 2023, which requires firms to deliver good outcomes for all customers, including those in vulnerable circumstances. The FCA has today published a review and good and poor practice examples to further help firms provide the right care consistent with the Consumer Duty, it said. Sarah Pritchard, executive director, competition, markets and international at the FCA said: “It can be hard to tell your bank or insurer about your specific needs but those who ask for help tend to feel more supported. We’ve seen good examples where financial firms are making a difference for vulnerable customers, but we know that vulnerable people report more negative experiences than others. “We want firms to build on the good work identified, to help people open up and make sure they get the support they may need.”

Only 4 in 10 vulnerable customers disclose issues

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