Despite FCA guidance and increased focus on organisations to better identify and treat vulnerable customers, 41% of people who fall into the FCA’s ‘vulnerable customer’ definition say they have been treated unfairly by organisations.
Research from the Vulnerability Registration Service found that 18% of vulnerable customers have missed payments or gone into arrears and 14% have taken on further borrowing/debt as a result of being vulnerable or falling into vulnerable circumstances within the last 12 months.
17.7 million Brits consider themselves vulnerable, equal to 34% of the UK population, with 13.1 million (25%) people saying they have experienced mental health struggles within the last 12 months. In the last year, 9 million (17%) people say they struggled to cope with finances and managing money, and 8.8 million people have been impacted by a life event such as the breakdown of a relationship, bereavement, or a job loss.
15% of the UK adult population have found it difficult communicating with organisations – speaking on the phone or physically visiting branches or outlets. Amongst those experiencing vulnerability, this situation is ever more acute with 57% of vulnerable customers spending more than two weeks trying to make organisations aware of their health circumstances.
Individuals with low levels of knowledge and confidence on financial matters, as well as low levels of English language or literacy skills, have been impacted the most, with 71% of this group spending over two weeks trying to communicate their circumstances to someone in an organisation. However, 29% did say that when they told the organisation about a vulnerability, it was acted upon and they were provided with help and support.
Amongst those that wouldn’t tell an organisation about a vulnerability, either their own or on behalf of someone else, 24% said it was because they didn’t think it would make a difference. Despite a reluctance on the part of many in making organisations aware of their vulnerability themselves, 63% would share details of their vulnerability if they were asked. Furthermore, 67% of Brits believe organisations should be proactive and carry out checks to identify the vulnerable. 63% of people also agreed that they would complain if they felt that they or a member of their family was unfairly treated because of a vulnerability.
Nearly two in three vulnerable adults (65%) would consider registering with a free service if it took on the task of flagging their circumstances on their behalf to other organisations. 64% would also consider letting details of their vulnerability be shared if it meant that they were better supported and treated fairly.
Helen Lord, CEO of the Vulnerability Registration Service, said: “These findings should act as a wake-up call. It simply isn’t good enough that so many vulnerable customers feel they are being unfairly treated. One in five (20%) vulnerable customers have continued to receive calls, emails or visits chasing up payments or for debt collection. This is unacceptable when you consider the fact that 31% of all the UK population have experienced some form of mental distress after being chased by organisations for missed payments or debt.
“Disclosing a vulnerability shouldn’t be so hard and the way an organisation responds shouldn’t be such a lottery. It is heartening that there are pockets of good practice but there now needs to be consistency across the board. Behind these statistics are vulnerable individuals who have already reached a limit on how much they can deal with. How is it that they are still being passed from pillar to post, having to explain their vulnerability time and time again or being chased for payments?
“This much is clear from our research – organisations must be more proactive. The only way to identify and protect the vulnerable from these experiences and further harm is to share data about them across sectors, and make checking for vulnerability a standard practice, like credit reference or affordability checks already are. The tools to make this happen already exist. If organisations truly are serious about treating vulnerable customers fairly, it is time to come together and move beyond words and guidance to action.”
Dylan Jones, CEO of IE Hub, said "Integrating the Vulnerability Registration Service into our system was a crucial step forward for IE Hub. We understand a large number of our users fall into the FCA’s ‘vulnerable customer’ definition, therefore, we wanted to make registration easy for these individuals. Now, any customer who uses the IE Hub platform can register their vulnerable status directly via the IE Hub platform."
For more information on Vulnerability Registration Service please visit https://www.vulnerabilityregistrationservice.co.uk/