With the New Year upon us, a high percentage of individuals and families are relying on borrowing money and extending credit to meet higher than normal outgoings incurred at Christmas and the extended holiday period.
Some customers at this time of year can often experience financial hardship. It is also true that many providers of financial services will have their busiest time of year. As a result, their policies, based around the fair treatment of vulnerable customers, come under greater scrutiny. The regulatory authorities will have no sympathy for any companies that exploit their customers and do not have comprehensive strategies and policies in place to deal with vulnerability and to be seen to be working within them.
So how resilient are policies and what measurements are in place to test how effective they are? We unfortunately see numerous examples where lip-service is paid to vulnerable customers, not least in the way that they are identified in the first place. Do company’s internal systems collect adequate information to identify customers who are potentially in a vulnerable situation? Who makes the decision to identify the customer as vulnerable, how are they communicated within the business and what medium is used to contact and keep the customer informed? As an example, not all customers have access to e-mail, so any key communication sent by this method alone will exclude certain customers. In fact, with some companies adopting automated communication processes only, they potentially limit their ability to spot vulnerability.
The reality is that there are often good policies in place, but it is down to the staff to implement them and ensure they are communicated correctly. The way that companies handle potential vulnerable customers can reveal their culture and highlight potential weaknesses in their methods of doing business.
Just because a vulnerable customers policy exists, does not mean it is being applied properly or even kept up to date as more people are identified in this category. The need for all businesses to ensure their policies and procedures are up to date, fit for purpose and tested regularly has never been more important.
If you believe you need help in assessing your own position, please get in touch.