The FCA Review of the Fair Treatment of Customers in Vulnerable Circumstances

The long awaited review of firms’ treatment of vulnerable customers has been released, along with the quantitative and qualitative research paper that supported the review.  

The review itself is positive, with the FCA generally pleased that the Consumer Duty has encouraged a ‘renewed focus among firms on delivering good outcomes’ for vulnerable customers, following the introduction of the Consumer Duty.

Both experts and firms participating in the review tend to agree that the 2021 Guidance remains useful, and that it should remain in place, as a supporting aid to the Consumer Duty.

The regulator is concerned, however, that despite research showing that consumers were able to report examples of firms responding flexibly to meet their needs, consumers continue to report challenges, particularly if they have multiple characteristics of vulnerability.

The initial findings were presented in three distinct sections:

1. Firms’ treatment of customers in vulnerable circumstances and consumer outcomes

   1. While many firms had made good progress in supporting customers in vulnerable circumstances, some areas for improvement remain, particularly around products and services and outcomes monitoring, and in providing tailored support for those with multiple characteristics of vulnerability.

2. Effectiveness of the Guidance

   1. The Guidance has had a positive impact on firms, particularly through positive changes in attitude, culture and awareness of vulnerability.

   2. Most of the FCA’s multi-firm work considered the guidance to be clear and useful in understanding how to apply expectations in practice.

   3. Some potential areas for improvement were suggested by experts and firms, including:

      1. Additional case studies for specific sectors and on how to treat customers with specific characteristics of vulnerability.

      2. Further guidance on data monitoring methods and examples of the types of outcome firms should be measuring.

      3. Further guidance on how to treat customers who do not disclose vulnerability, both where this is detectable by the firm and in situations where firms don’t have sight of their customers.

      4. Referencing the intersecting impacts of vulnerability drivers and protected characteristics.

3. Relationship between the Guidance and the Consumer Duty

   1. Firms and experts found the Guidance and the Consumer Duty to be complementary.

   2. There was strong support for retaining the Guidance as a separate resource to support and complement the Consumer Duty.

The FCA has, as a result, published a separate piece ‘Delivering good outcomes for customers in vulnerable circumstances – good practice and areas for improvement’.

Key areas for improvement include:

• Some firms were unable to show how they effectively monitor and take action on outcomes for customers in vulnerable circumstances, including not being clear on what good outcomes look like, having clear ways of measuring them, and not escalating issues or making changes where needed.

• Failing to appropriately support staff in identifying vulnerable customers, encouraging customer disclosure, or providing prompt support.

• Failing to communicate clearly to meet the needs of vulnerable customers, including not providing appropriate or accessible channels to customers in vulnerable circumstances, and a lack of testing of consumer understanding.

• Most firms could not show the FCA how they had embedded the needs of customers in vulnerable circumstances into their product and design process. There was also a lack of training on vulnerability for product and design staff.

The publication is split into sections, setting out where firms are coming up short, and what they can do to make improvements.

A major area for improvement in the products and services element is that few firms are training product and service design staff on vulnerability, and where there is training, it is not covering often enough how their role can affect customers in vulnerable circumstances.

Frontline staff, too, must have the skills and ability to recognise and respond to various characteristics of vulnerability, and, importantly, know how multiple characteristics of vulnerability impact customers and how they interact with the firm.

The FCA is clear that firms have a responsibility to support and train staff on recognising indicators of vulnerability and supporting customers towards disclosure. This can be very difficult for inexperienced staff.

Our Fair Treatment of Vulnerable Customers course, updated for 2025, covers how to identify a range of vulnerabilities, what it means when someone is experiencing more than one vulnerability, how to support customers, and how to record vulnerability, in line with the law. Importantly, it covers step by step how to encourage and guide customer disclosure.

We offer an extensive range of online training. Browse our full 2025 course catalogue here, or contact us at robert.bell@rbcompliance.co.uk for more information about enrolling groups.