On 16 June 2022, the FCA published a new webpage, Ensuring the fair treatment of customers in vulnerable circumstances.

In the webpage the FCA states that, since the publication of Finalised Guidance 21/1 ‘Guidance for firms on the fair treatment of vulnerable customers’ (FG21/1) it has seen good examples of firms taking positive action to understand the needs of customers in vulnerable circumstances and meet those needs. However, it also states that from its recent engagement with retail banks, it has seen inconsistent practice and identified areas where it expects to see improvement and additional focus from firms.

The webpage also refers to a Dear CEO letter that the FCA has issued, The rising cost of living – acting now to support consumers. In the Dear CEO letter the FCA states that, as consumers across the country are affected by the rising cost of living, it is critical that lenders meet the standards the regulator expects to support borrowers, including those in financial difficulty. It adds that firms will need to understand the changing pressures on consumers and that some consumers will be in vulnerable circumstances or may be experiencing financial difficulty for the first time. Firms’ frontline services will have to deal with more customers presenting with a complex range of vulnerable circumstances and non-financial knock-on effects of the rising cost of living.

In this context, the Dear CEO letter reminds firms that it is vital that they treat borrowers fairly and refers to the standards and rules that firms are expected to follow – the Principles for Businesses, MCOB 13, CONC 5D, 6 and 7, the Tailored Support Guidance for mortgages, consumer credit and overdrafts and FG21/1.

The Dear CEO letter then goes on to cover:

  • The FCA’s expectations of firms.
  • Findings from the FCA’s review of outcomes for borrowers in financial difficulty.
  • Embedding FG21/1.
  • Relevance to small business customers.
  • Relevance to buy-now-pay-later products.

An Annex to the Dear CEO letter sets out the findings from the FCA’s work on Borrowers in Financial Difficulty and its expectations of all firms.

Firms are asked to consider the Dear CEO letter and its annex and take action where necessary to ensure that they are well placed to support customers now, and as the situation becomes more challenging in the months ahead.