From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to www.ukfinance.org.uk for wider content and updates from UK Finance.

Last updated: 15 June 2017

At a glance

  • Not easily defined nor necessarily a permanent state, vulnerability can be sporadic or temporary in nature.
  • The propensity of vulnerability in the UK can be measured in a number of ways. Examples include literacy rates; the number of people who are disabled; registered carers; unemployed.
  • The financial services industry, not just mortgage lenders, must ensure that interactions with consumers are tailored to their needs, so that those who are vulnerable are not unfairly treated as a consequence of inflexible processes. 
  • In February 2015, the Financial Conduct Authority (FCA) published a paper on Consumer Vulnerability which asserts that “Financial services need to be able to adapt to the changing circumstances that real life throws at people…”
  • On 23 February 2016, the BBA Vulnerability Taskforce published it's report: Improving outcomes for customers in vulnerable circumstances. The report received contributions from within the financial services industry, together with charities and consumer groups - focusing on how the industry as a whole can improve the experience of vulnerable customers.
  • Following the Thematic Review 'Mortgage lenders’ arrears management and forbearanceTR14/3', the Financial Conduct Authority (FCA) undertook a review of lenders’ treatment of financially vulnerable customers.
  • As part of the review, the FCA set out to understand what strategies mortgage lenders have in place to mitigate the impact of an interest rate rise on financially vulnerable customers (i.e. those less able to cope with an increase in their monthly payment, including customers not currently in arrears). The review focussed on the treatment of existing customers and the FCA says it was “encouraged that most firms have acted following publication of our previous thematic report and our Occasional Paper No.8: Consumer Vulnerability.
  • The review also found firms are at different stages in developing strategies to mitigate the impact of an interest rate rise on financially vulnerable customers and for some it appears that more work is needed before these strategies will be ready to implement. Read the key findings from the review.
  • 21 March 2017: The Finance & Leasing Association (FLA) and The UK Cards Association launched a new publication – Vulnerability; a guide for debt collection –  that will help their members to better identify and support customers in vulnerable circumstances. Both trade associations worked in partnership with the University of Bristol’s Personal Finance Research Centre (PFRC) to develop this work. The guide describes strategies to help staff deal with specific and often challenging vulnerabilities, such as serious or terminal illness, bereavement, addiction, and mental health issues. The document also provides guidance on developing training programmes and working with partner agencies, as well as 21 case studies that illustrate the difference that appropriate handling can make to a customer in need of extra support. The guide is also accompanied by a separate data report.
  • 14 June 2017: The Finance & Leasing Association (FLA) and The UK Cards Association launched a new publication - Vulnerability: a guide for lending - telephony, face-to-face, and online.The guide provides lenders with a renewed focus, new insights, and new tools for working with customers in vulnerable situations. It is the second guide from research funded by the Finance & Leasing Association and The UK Cards Association and brings together new survey data collected from 1,666 staff who directly take customer credit applications in a representative sample of UK lenders.

CML position

We believe that mortgage lenders should ensure, as much as is reasonably possible, that customers who exhibit vulnerability are treated in a way which caters for their individual needs. This treatment extends from the point that a mortgage sales discussion takes place, right through the life of the product and in any interactions the lender has during the term of the mortgage. For example, many lenders have in place bespoke processes in an arrears environment, which has meant that those who are vulnerable receive a different treatment to those who are not when they cannot meet their mortgage obligations.

Lenders should ensure that vulnerability is recorded within their systems and make their customers aware that they are doing this. A joined-up, customer-level approach rather than a product-level approach (vulnerable customers could, for example, hold a mortgage and bank account with the same provider, but the vulnerability is only identified when interacting over the mortgage) can help reduce the need for a customer to repeat themselves and makes it easier for firms to adopt. 

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