Vulnerable customers urged to open up to financial services firms

Vulnerable people who are dealing with financial services companies have been encouraged to make their circumstances known.

Research by the Financial Conduct Authority (FCA) has found that just four in 10 vulnerable customers have disclosed their needs to financial services providers, such as banks and insurers.

However, the watchdog believes that if these people open up, they could have a much better experience.

In a poll of vulnerable customers who’d discussed their needs:

• 74% said staff asked the right questions to understand their situation
• 58% said their firm took steps to give them the support they needed
• 57% said their firm cared

Sarah Pritchard, executive director of supervision, policy and competition at the FCA, said: “It can be hard to tell your bank or insurer about your specific needs, but those who ask for help tend to feel more supported. 

“We’ve seen good examples where financial firms are making a difference for vulnerable customers.”

Vulnerable people don't feel comfortable opening up

Despite the benefits of opening up, most vulnerable people are choosing to stay quiet.

Of those who had disclosed their personal circumstances:

• 19% were encouraged to do so by the firm
• 22% believed it was necessary given their situation
  

But figures showed that one in four vulnerable people don’t feel comfortable explaining their situation.

The poll highlighted many reasons why they're choosing to stay quiet, including:

• embarrassment - 37%
• not wanting to be treated differently - 24%
• worry that they might get a worse deal - 23%
• not knowing that their firm would help - 19%
• security concerns - 16%
• circumstances not having an impact on their financial affairs - 16%
• not thinking it’s relevant - 11%

However, almost half of vulnerable customers said they’d had a negative experience with a financial services firm, compared with one in three non-vulnerable people.

“We know that vulnerable people report more negative experiences than others,” said Ms Pritchard said.

“We want firms to build on the good work identified, to help people open up and make sure they get the support they may need.”