The FCA has published the findings of its thematic review into financially vulnerable customers. The review follows the FCA February 2014 thematic review into mortgage lenders’ arrears management and forbearance.
The FCA implemented the thematic review so that it could get a better understanding of what strategies mortgage lenders have in place to mitigate the impact of an interest rate rise on financially vulnerable customers (i.e. those less able to cope with an increase in their monthly payment, including customers not currently in arrears).
Generally the FCA has found that the firms sampled were at different stages in developing strategies to mitigate the impact of an interest rate rise on financially vulnerable customers and for some more work would be needed before the strategy could be implemented.
The FCA provides examples of mitigation strategies that more prepared firms have developed which include providing all front-line staff with training to help them recognise signs of financial difficulty and know when to refer customers to a specialist area.
The FCA also provides examples of more developed lender communication strategies which include piloting customer contact exercises (focusing on those more susceptible to a rate rise) to test engagement and inform strategy development.
View Financially vulnerable customers’ thematic review: key findings, 6 September 2016