FCA recently came out to give its view, and a warning at that, about where consumers stand in the pandemic. Their aim, which is to have all vulnerable consumers treated fairly across all financial service sectors, led to a draft that will protect the 24m vulnerable consumers across the UK.
A vulnerable consumer is one who is susceptible to unfair treatment from the company due to their personal circumstances. They can do nothing to retaliate or defend themselves when faced with challenges from companies. Therefore, a regulatory body has to stand up for their cause.
Therefore, FCA regulates all the financial firms and seeks to maintain integrity in services provided to consumers.
Who Does the Order Apply to?
- FCA-regulated firms, and also their representatives.
- Trade bodies, and even industry groups.
- Organizations of consumers and those that represent vulnerable consumers’ interests.
- Consumers and their advisors.
The Order to Protect 24m Vulnerable Customers
The order to protect vulnerable customers was a concern even before the pandemic. FCA had put it out there in 2019, about how firms should treat vulnerable consumers.
Comments before coronavirus, adding the repulsions of the pandemic, led to the analysis of the issue. FDA had to consider the available resources for more urgent interventions, which would protect the consumer.
The regulatory body will give the way forward, which will be required to give clarity on how the consumers will be treated. It further offers guidance to companies on how they will comply with Principles that have been there, and those currently being enacted.
Fair treatment, especially of vulnerable consumers,doesn’t have to be just in theory or respected because it is part of the law.
On the contrary, companies and firms should embrace it. It should be included in their culture, policies, and processes, so that complying becomes part of the company values.
Then, all the finalized guidance should be the cornerstone of any discussion between firms and supervisors. They will talk about how vulnerable consumers should be treated. Moreover, rules regarding what should be done to companies that show unfair treatment to consumers will be set.