Consumer Duty Newsflash - March 2025

The FCA has today published their Vulnerability Review and Good and poor practice for helping customers in vulnerable circumstances.

They have found that just 4 in 10 vulnerable customers have disclosed their needs to their financial services provider. Vulnerable customers have been put off disclosing their vulnerabilities because they are uncomfortable explaining their situation or are embarrassed, amongst other reasons. Those that have disclosed have tended to have had better experiences with their financial service provider as a result, with the majority reporting that staff have asked them the right questions to understand their situation, feeling that the firm ‘cared’ and that the firm took action to provide the support they needed.

However, vulnerable customers are more likely to report a negative experience with financial services firms, compared to non-vulnerable customers.

The FCA has also provided examples of good and poor practice for firms in delivering good outcomes for customers in vulnerable circumstances. The FCA have found that the main areas for improvement are:

• Ineffective outcomes monitoring
• Failure to give appropriate support
• Failure to communicate clearly to meet the needs of customers in vulnerable circumstances
• Lack of tailored training and embedding consumers’ needs into product and service design

Interestingly, the FCA note that they will not be updating their Non-Handbook Guidance for firms on the fair treatment of vulnerable customers, as they have concluded that it remains appropriate and helpful, based on feedback from their review.

We will be circulating our full analysis of the review and the good/poor practice report this next week.

The FCA will be hosting a live webinar to reflect on the findings, share learnings, and discuss next steps on Tuesday 11 March – we are attending and will update you on this too.

Please let us know if you would like to discuss.