The Financial Conduct Authority (FCA) is taking an increasing interest in the fair treatment of vulnerable customers – defining them as those who, due to their personal circumstances, are “especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”. In July, the FCA announced it will consult early in 2019 “on guidance for firms on the identification and treatment of vulnerable consumers”.
The UK has an ageing population and the FCA estimates that 60% of those aged over 65 are potentially vulnerable.
Under MorganAsh’s new vulnerability assessment service, when bank or building society staff are concerned a customer may be vulnerable they can refer them to a qualified nurse.
In a friendly and empathetic manner, the MorganAsh nurse will contact the customer and assess them, based on physical and mental health, lifestyle and other factors such as the strength of their support network. A measurement is then made using the MorganAsh vulnerability score, which provides an objective, recordable output that can be retained for audit and compliance purposes.
After assessing whether the individual’s condition is temporary or permanent, MorganAsh will make recommendations on appropriate next steps for the lender.
Benefits of the vulnerability assessment service:
- Improved outcomes for vulnerable customers.
- Helps the lender meet FCA requirements on treating customers fairly and vulnerability.
- Helps to avoid repossessions involving elderly borrowers and accompanying negative publicity.
- Opportunity to differentiate the lender’s service through a compassionate vulnerable-customer strategy.
The service also includes options for a longevity prediction for the customer, assistance with a will or lasting power of attorney, crisis support and help finding a suitable care home.
Andrew Gething, managing director of MorganAsh, said: “With lenders now granting mortgages that people can be repaying well into their 90s, it is increasingly important that these companies have systems in place to understand and act appropriately when customers are experiencing difficulties such as mental or physical illness or bereavement.
“A fair and compassionate approach to dealing with vulnerable customers is crucial to ensure the best possible outcomes for individuals and also to avoid lenders falling foul of the regulator, for which this is an increasing area of focus.
“Our service helps the bank or building society understand the customer as an individual and act appropriately to their situation, thus avoiding the dreadful stories we’ve all read about where a vulnerable elderly person faces having their home repossessed after falling behind with interest payments.
“So, for example, where our assessment shows an individual has run into difficulties after a personal tragedy, but this is likely to be a temporary crisis, we might recommend a payment holiday on the mortgage.
“At the other end of the spectrum, where a borrower has developed Alzheimer’s and lacks a support network, the solution may be for their home to be sold to finance them moving into a care home and we can provide ongoing support with that process.”