Identifying and meeting the needs of vulnerable customers

By Santé Group

27 Oct 2023

Website
Vulnerable Customers LBV.png.png

In an era of increasing awareness surrounding financial fairness and ethical business practices, the protection and well-being of vulnerable customers have come into sharp focus.

The Financial Conduct Authority (FCA) has taken notable steps to emphasise the significance of recognising and understanding the needs of these customers, ensuring that they receive suitable products and services.

But why is this so crucial?

Defining Vulnerable Customers

The FCA defines vulnerable customers as -

“Vulnerable customers are someone who, due to their personal circumstances, is especially susceptible to harm – particularly when a firm is not acting with appropriate levels of care.”

These personal circumstances could range from health issues to financial instability, age-related factors, or even language barriers. In essence, vulnerability encompasses a wide spectrum of challenges that can significantly impact an individual’s financial well-being.

The FCA’s Commitment

The FCA has built upon existing guidance surrounding the fair treatment of vulnerable customers. The FCA recognises that firms have a responsibility to treat all customers fairly, irrespective of their vulnerability status.

Implementing Clear Controls

One of the core aspects of the FCA’s approach is the requirement for firms to implement clear controls for recognising and documenting when a customer is ‘vulnerable.’ This involves a proactive approach to identifying signs of vulnerability and documenting them appropriately. By doing so, firms can tailor their interactions and product offerings to meet the unique needs of each customer, ensuring they are not put at undue risk.

The New Consumer Duty

The introduction of the Consumer Duty adds an additional layer of responsibility on firms. This duty compels firms to go beyond identifying vulnerability; it mandates a deeper understanding that all customers, regardless of their initial circumstances, are at risk of becoming vulnerable. This is a fundamental shift in perspective, one that emphasises the need for clear, fair, and not misleading information, with a continuous duty of care.

Why It Matters

Understanding and meeting the needs of vulnerable customers is not just a matter of compliance; it’s a matter of ethics and good business practice. Here’s why it matters:

Financial Inclusion

By catering to the needs of vulnerable customers, firms contribute to a more inclusive financial ecosystem where everyone has the same level of access to suitable products and services.

Avoid foreseeable harm

Identifying and addressing vulnerabilities early can prevent customers from falling into financial hardship or making detrimental financial decisions.

Enhanced Reputation

Firms that prioritise the well-being of their customers build trust and a positive reputation, leading to long-term customer loyalty.

Consumer Duty

Adhering to FCA guidelines and the Consumer Duty is not just a legal obligation but also a marker of responsible business conduct.

Recognising and understanding the needs of vulnerable customers is not only a regulatory requirement but a moral imperative. It’s a commitment to ensuring that all individuals, regardless of their circumstances, have the opportunity to thrive financially.

Further Considerations

  • Firms should understand that characteristics of vulnerability are likely to be complex and overlapping.
  • Firms should understand what characteristics of vulnerability are likely or more often to be present within their target market or customer base. 
  • Consumers may not want the label ‘Vulnerable’ applied to them. It is suggested not to directly use the term during interactions, instead the focus should be on what the potential harm/disadvantage may be.
  • Not all customers with characteristics of vulnerability will be vulnerable, but they may be more likely to have additional or different needs which may impact ability to make decisions, or to represent their own interests.

Enjoyed this? Read more from Santé Group

Latest news

1

New India branch campus on the horizon for Lancaster University Keir Starmer meets Indian PM and included Prof Simon Guy Lancaster University. Pic Simon Dawson

New India branch campus on the horizon for Lancaster University

09 Oct 2025

2

Best events and talented students complete finalists list for Lancashire Tourism Awards 2026 Best Events and Talented students on Lancashire Tourism Awards finalist list

Best events and talented students complete finalists list for Lancashire Tourism Awards 2026

09 Oct 2025

3

East Lancashire Learning Group named UK digital transformation leader in CIO 100 Awards Andrew Dewhurst with the award win

East Lancashire Learning Group named UK digital transformation leader in CIO 100 Awards

09 Oct 2025

4

PHX Training appoints new business leader in Blackpool Jason Davenport PHX Training

PHX Training appoints new business leader in Blackpool

09 Oct 2025

5

Velocity seals Airbus extension worth up to $54m Velocity Composites Has Announced Its Entry Into The Us Market

Velocity seals Airbus extension worth up to $54m

08 Oct 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

Advantage: AI – A Workshop for Business Leaders – Oct 10th
Ai 10.10.png.png
LBV Hub Seminars
10 Oct 2025 - 10 Oct 2025

Advantage: AI – A Workshop for Business Leaders – Oct 10th

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

09:00 - 12:00

Unlocking major project opportunities in the North West
Lancs-cham-logo.jpg.jpg
LBV Hub Seminars
15 Oct 2025 - 15 Oct 2025

Unlocking major project opportunities in the North West

Strathmore Hotel, Morecambe, LA4 5AP

08:00 - 10:00

The New Employee Rights Landscape: Day One Compliance Essentials
EventBrite NORi - 15th Oct 2025 Webinar.png.png
LBV Hub Webinar
15 Oct 2025 - 15 Oct 2025

The New Employee Rights Landscape: Day One Compliance Essentials

Microsoft Teams, Microsoft Teams, PR253XH

13:30 - 15:00

The Autumn Re set - pour me a wine
LBV Advert_Autumn Reset 1200 x 630px.png.png
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

The Autumn Re set - pour me a wine

The Artistry House , Preston , PR1 3JJ

17:30 - 19:30

The Business Network Central & East Lancashire
LBV Header (26).png.png
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

October Freelancer Meet-Up
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

October Freelancer Meet-Up

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Women scaling up Blackpool Fylde and Wyre
LBV Hub Seminars
22 Oct 2025 - 09 Jan 2026

Women scaling up Blackpool Fylde and Wyre

The Small Business Academy, Blackpool, FY4 5JX

09:30 - 15:30

HR Essentials for pubs, bars and licensed venues
EventBrite NORi - 22nd Oct Webinar.png.png
LBV Hub Webinar
22 Oct 2025 - 22 Oct 2025

HR Essentials for pubs, bars and licensed venues

Online - Teams, Leyland, PR253XH

13:30 - 15:00

RISE - Lancashire's unique leadership programme for women
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
22 Oct 2025 - 18 Mar 2026

RISE - Lancashire's unique leadership programme for women

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:30 - 15:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV124 Online Graphic
Subscribe now

Weekly news bulletin