This week, the Financial Conduct Authority (FCA) announced plans to join
together with other regulators to stamp out potentially bullying behaviour
towards vulnerable clients.
It has long been a concern of Advice Guru that older consumers are subject
to excessive communications when falling behind on their bills. This may be
because the consumer is experiencing financial difficulties, or may be due to
simpler factors such as they forgot to pay the bill, or did not realise it was
due. The cost of living crisis has made the situation worse which led the
regulators to unite in this advice.
Vulnerable clients
When asked about the issues, Stuart Powell, Managing Director of Advice Guru
explained,
‘I often visit clients who are experiencing mental health difficulties
caused and exacerbated by individual firms chasing their money. A unified and
coherent solution to support those in debt is long overdue.’
The FCA has joined forces with other regulators, namely Ofgem, Ofwat and
Ofcom to write a letter to firms within the companies they regulate outlining
their concerns and proposed solutions.
Two National publications featured this story this week, along with the
quotes from Stuart Powell.
https://www.birminghammail.co.uk/news/cost-of-living/ofgem-ofwat-ofcom-launch-joint-28840356
https://theintermediary.co.uk/2024/03/fca-calls-on-firms-to-improve-debt-collection-practices/
Equity Release advice
Stuart went on to explain,
‘We speak to a lot of potentially vulnerable consumers as they are within
the age bracket who need our advice on their borrowing needs. Whether that be
Equity Release, a RiO mortgage or other form of over 50s borrowing for
homeowners, we advise them all.’
Ensuring companies who have vulnerable consumers have processes in place to
protect their clients is a key aim of the regulator. The vulnerabilities could
be financial difficulty which is easily worsened by heavy handed approaches of
companies who are owed money. The regulator wants these companies to commit to
improving their debt collection processes to ensure vulnerable consumers are
not put at further risk of harm.
Advisors supporting consumers
The rules and guidance around how to identify and treat vulnerability in
later life lending consumers is a major feature of the advice process. Often,
advisors within the industry are supporting consumers who have been treated
badly by firms they owe money to. By ensuring that all these other firms are
held to the same standard as advice firms, the regulators have taken a big step
to support more vulnerable members of our society.
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