Adopt our nine key principles and empower frontline staff - to help vulnerable customers
Published: 22 June 2016 | Author: Joanna Elson OBE, Money Advice Trust
At some point or other, many of us will find ourselves in vulnerable circumstances. Most typically, this can be caused by life events such as a job loss, bereavement or serious illness, but there are numerous other factors that can also contribute to the vulnerability of an individual. For the majority, this will be a temporary state, while for others it will be a longer-term issue.
Regardless of duration, vulnerability can affect an individual’s relationship with their financial services providers, such as their mortgage lender. Ensuring that those in need are able to access the right support and solutions for their circumstances is therefore critical for any firm.
The vulnerability taskforce
At the Money Advice Trust, we help people in vulnerable circumstances to deal with their debts every week through our National Debtline and Business Debtline services – and we have also developed extensive training on vulnerability for both advice agencies through our Wiseradviser programme, and for financial services firms. This has strengthened significantly our understanding of what works.
I was therefore delighted to be able to put our experience into effect in my role as chair of the financial services vulnerability taskforce, set up by the British Bankers Association last year. Building on the Financial Conduct Authority’s occasional paper on vulnerability, the taskforce brought together a wide range of trade bodies such as the Council of Mortgage Lenders and Building Societies Association, as well as individual banks and building societies, charities and consumer groups. Our purpose was to address how financial service providers can improve the experience of this group of customers.
Drawing evidence from across these sectors and speaking with a range of stakeholders, we have put at the heart of the taskforce’s report – ‘Improving outcomes for customers in vulnerable circumstances’ – a shared vision that all customers of financial service firms, including those in vulnerable circumstances, receive a responsive and flexible service, with products appropriate to their needs. The report does not seek to stop firms from competing or innovating in how they handle vulnerability but offers instead nine high-level principles based on customer outcomes that we recommend firms should incorporate.
The nine key principles
The report’s first two principles, the need for a sensitive, flexible response when customers seek help and support, and ensuring effective access to support, are closely related. We heard that, for many lenders, there will often be just one chance for staff to capture an issue and put in place the right plan of action for the customer. It is vital, then, that all frontline staff have the confidence and support to be flexible in their response. This could be achieved by ensuring that training programmes fully incorporate supporting customers in vulnerable positions.
Access to practical, jargon-free information through a range of communications channels is also essential. Where appropriate, we would like to see organisations signposting to relevant external sources of help, beyond simply money and debt advice, so that if a customer needs a referral to the Alzheimer’s Society, they can receive it from their mortgage lender.
Thirdly, we would like to see the idea of a ‘one-stop notice’ adopted more widely so that customers in vulnerable circumstances need only tell firms about their personal situation once. Data protection restrictions mean that this is easier in theory and harder in practice, so we have recommended that the Information Commissioner’s Officer should help industries to produce guidance on what is acceptable.
The right kind of support
Our fourth principle is that customers should have access to specialist support, including dedicated points of contact if they need regular or ongoing assistance. We identified several examples of good practice across sectors and think this could be extended more consistently.
Principles five and six are also linked: at a customer’s request, firms should make it easier for a friend or family member to help them to manage their money. Due to a lack of knowledge amongst frontline staff of power of attorney and similar mechanisms, this is not always the case. We would like to see firms develop their third party access options to enable customers to authorise their carer, friend or family member to help manage their account or mortgage payments, for instance. Some good practice is already under way on this.
Next, there is a need to ensure that customers are protected by their financial service providers from scams and financial abuse. The taskforce found that firms were determined to protect customers from falling victim to fraud. However, fraud is unfortunately an area where it is criminals, not firms, that set the pace of innovation. Work undertaken by Financial Fraud Action UK is welcome, and we would like to see its principles for protection of adults at risk of fraud applied more widely.
Focusing on customer needs
Our seventh principle is the need for customer-focused reviews. Staff do their best to help customers but our research found that firms’ internal monitoring can sometimes focus too rigidly on internal policy requirements, as opposed to what would be most helpful to the customer. Firms should pro-actively build customer feedback methods to ensure that processes are continually being improved for all customers.
Finally, there is a need for industry alignment. We found that a seamless journey across firms made a positive difference for customers in vulnerable circumstances and we support the work that many lenders are already doing to explore the feasibility of a ‘tell us once’ type of scheme for reporting a customer’s death.
I hope that the taskforce’s recommendations will form a helpful basis for organisations across a number of sectors to think about how they currently treat customers in vulnerable circumstances, and how their experience could be improved. Of course, every firm is different and there can be no one-size-fits-all approach.
This is no doubt a considerable challenge but also an opportunity for firms to think creatively about how these ideas could work for them and to get it right for their customers. I have never been more confident that we can make progress in this area.
Read the taskforce’s final report here.
We urge anyone encountering problems in managing their mortgage – for whatever reason – to talk to their lender as soon as possible. We have also published our own advice for consumers on what to do if you are worried about your mortgage.