Banking providers failing grieving families, says FCA

The UK’s financial services watchdog has told banks and building societies to improve how they support bereaved customers and those registering a power of attorney.

According to the Financial Conduct Authority (FCA), some firms have made a “real difference” since the Consumer Duty was introduced two years ago, such as: 

• introducing clear policies and procedures
• actively using data to better identify the needs of customers
• using these insights to improve support for customers

The Consumer Duty requires financial services companies, such as banks, to put their customers’ needs first.

Under the standard, customers must:

• get the support they need, when they need it
• receive communications they can understand
• only be recommended products and services that are suitable for them

Companies showing ‘lack of empathy’

While the FCA believes many firms have “taken steps to refine their approach” towards “customers in vulnerable circumstances”, it said this wasn’t “universally the case”.

For example, it said that since 2023, some companies have shown a “general lack of empathy” in bereavement and power of attorney cases and aren’t providing the same level of service, partly because of inadequate training.

This, it warned, means some people and their representatives haven’t been able to access money to pay essential bills.

“When banks and building societies get it right for their customers they can make a real difference at a difficult time,” said Emad Aladhal, the FCA’s director of retail banking.

“But when they fail to recognise and respond to customers who need more help, it adds to the stress.”

“Our message to consumers is this - if you need to notify your banking provider about a bereavement or a power of attorney, speak to them about how they can support you and meet your needs.”

Industry ‘working hard to support customers’

Banking and finance industry body UK Finance has insisted the sector is working hard to support all customers, including those who have been recently bereaved and people who need to set up a power of attorney.

However, spokesperson Fiona Turner acknowledged that there is “more to be done”.

“Firms take care to identify the needs of their customers and ensure they receive the right support needed for them,” she said.

“We are working with our members and the FCA to look at how greater consistency and improved consumer outcomes can be achieved across the industry.”

What should you expect after a bereavement or when registering a power of attorney

If you’re letting a bank or building society know about a loss in the family or registering a power of attorney, there are several things you should expect to get.

Clear guidance

Financial services firms should let you know what documents you need and why and use straightforward language without complex jargon.

Sensitive communication

Staff should acknowledge the emotional distress you’re going through and respond with empathy.

Timely action

Processes should move quickly and smoothly, without unnecessary delays, and without you having to repeat information to different people.

Accessibility

If you're struggling to attend in person, banks should offer alternatives like phone or online support and accept documents electronically where possible.

If you’re not happy with the service you’ve received, then complain directly to your bank or building society.

And if they can’t or won’t deal with your grievance in a way you’d expect or hope for, you can take it to the Financial Ombudsman Service.