As the coronavirus continues to spread in the UK, a new consumer vulnerability front is opening up. The FCA has emphasised to firms that it expects them to have contingency plans in place to deal with major events and will be reviewing, inter alia, “the steps firms are taking to serve and support their customers”[i].
With the UK government action plan indicating that as many as one-fifth of the UK’s work force might be absent from work during peak coronavirus weeks[ii], financial services firms will need to be especially alert to the potential for some customers to experience short-term financial difficulties (as a result, for example, of being ineligible for sick pay) or other forms of vulnerability.
The FCA has consistently emphasised that individual customer vulnerability can be a transient as much as a permanent state. In line with its overall approach to the treatment of vulnerable customers, and particularly to debt and arrears, the FCA will expect fair treatment and reasonable forbearance where customers experience financial difficulties as a result of coronavirus. This may include, for example, allowing customers longer to pay debts or agreeing lower payment amounts.
Whilst not all customers affected by coronavirus will be vulnerable, the FCA will, nevertheless, expect firms to pay attention to other indicators of potential vulnerability and exercise extra care where customers may be vulnerable.
Specifically, it will expect firms to be proactive in assessing how their customers may be affected by the virus and take steps to help them. This may include giving customers clear information about product features that may help to mitigate the impact of the virus (for example, insurance coverage or payment breaks), ensuring that any claims, in the case of insurance, are dealt with promptly, and signposting customers to other sources of help. The FCA will further expect firms to have considered the potential implications for small business customers (e.g. supply chain issues or other coronavirus related business disruptions) and have appropriate plans and procedures in place to ensure they are treated fairly.