Many of us will find ourselves vulnerable at some point in our lives.
So it’s rather worrying to hear that some people seeking help from financial providers are coming up against a “computer says no” approach which could be putting them at risk of further harm.
The Financial Conduct Authority (FCA) has been looking at how the industry can work together to improve the way they recognise the signs of someone being potentially vulnerable.
This means that rather than just treating someone like a “typical” one-size-fits-all customer, they are offered more specialist support where needed.
Of course, people can find themselves vulnerable for a wide variety of reasons, not all of which may be due to a sudden, life-changing event.
Research has shown that one in seven adults has the literacy skills of a child aged 11 years old or younger, while just under half of UK adults has a numeracy attainment age of 11 or below.
Meanwhile, it is estimated that 7.1 million adults in the UK have never used the internet.
Many people are also living on a financial knife edge. According to the Money Advice Service (MAS), almost half of adults do not have enough savings to cover an unexpected bill of £300.
There are also issues around our ageing population to consider. More than 1.4 million people in the UK are aged 85 years old or over. The number of over-85-year-olds in the UK is predicted to double in the next 20 years.
Despite this, the FCA has heard from consumer bodies who say people in difficult circumstances are struggling with some firms’ rigid policies.
Some firms are being “overzealous” in applying their rules, or are bombarding customers with complex information that makes it hard for them to weed out what’s important from what isn’t, the regulator has found.
In one case, a cancer patient told the FCA that they had contacted their bank to discuss a temporary loss of income, but instead of talking through their options, they were told to call back when their accounts were in arrears.
In another example, a carer who held legal power of attorney reported that she had problems with a cashier refusing to serve her, and another cashier refusing to accept her blind mother’s signature.
The FCA says there are several steps that financial services providers can take to help vulnerable customers - many of which would benefit everyone generally.
These include having clear and easy-to-understand financial products that do not contain surprises which only surface when a crisis strikes.
Firms can also help by offering people a choice of ways to communicate with them, such as face-to-face, phone, text, post, email and web chat.
The FCA says it is also important for people to feel that they will be treated as “an individual and you won’t face the ‘computer says no’ response just because your circumstances do not fit the standard mould”.
Being able to talk to someone who has time to listen and being offered flexible outcomes are also seen by the regulator as important.
In some situations, a firm may temporarily take measures to help someone who is struggling financially.
But, given the wide array of issues that can crop up, other possible options to help vulnerable customers could include looking at alternative ways of paying a bill, helping someone register a power of attorney, stopping letters being sent to someone who has died, or not relying on an automated process to decide how “credit-worthy” someone is.
Caroline Rookes, chief Executive for the Money Advice Service, says it’s encouraging to see firms being given a nudge to tailor their approach.
She says: “Given the long-term nature of many financial commitments such as loans and mortgages, it is important for firms to be able to support people in adapting to the real-life events which can impact on their finances.
“Our research shows that people across the UK don’t plan ahead for the major life events which can make them vulnerable.
“When people do experience financial shocks, many don’t seek advice until they are in crisis.”