On 19 January 2022, the FCA issued a webpage regarding its borrowers in financial difficulty project which is intended to ensure firms continue to support borrowers in financial difficulty. With the pandemic ongoing the FCA wants to reiterate its expectations for the treatment of customers, as set out in the Tailored Support Guidance (TSG) for mortgages, consumer credit and overdrafts. The FCA also details some of its interim findings to help firms ensure they deliver the best outcomes for customers needing support. The interim findings are based on firm surveys conducted in July, September and November 2021 and cover: offering appropriate forbearance, fair treatment of vulnerable customers, fees and charges, systems, processes and training and debt advice.
In terms of the fair treatment of vulnerable customers, the FCA reports that many firms have told it that they identify and flag where customers are in vulnerable circumstances, over 70% for mortgage and credit card firms and 50-60% for most other consumer credit firms. Some firms provide flexible customer service, different communications options, and adjustments when interacting with customers in vulnerable circumstances. Across all sectors, the FCA found that firms often report using the same most common forbearance options for customers in vulnerable circumstances as those who are not. As a result of these findings the FCA will review how firms are implementing the guidance on the fair treatment of vulnerable customers (Finalised Guidance 21/1) in its ongoing work.
The FCA states that it will continue to engage with the firms, identified in its work, who risk not meeting the requirements. This includes asking for changes to be made to firms’ policies and processes. The FCA may also use its formal powers where it considers it’s appropriate and proportionate.
The FCA is also continuing in-depth work to assess whether consumers are getting fair and appropriate outcomes, including customers with characteristics of vulnerability.
This will shape the FCA’s next phase, including targeted action with firms not meeting expectations, and considering whether to make permanent changes to rules and guidance.
The FCA will collate and publish its findings in the second half of 2022.