Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

FCA Calls for Greater Clarity on Support for Vulnerable Customers

The Financial Conduct Authority (FCA) has stated that many firms are not clearly demonstrating how they support the needs of vulnerable customers once identified. This follows a review into firms’ approaches to products and services under Consumer Duty requirements.

The FCA noted that while many firms have processes in place to identify vulnerable customers, there is less clarity on how these firms adapt their products and services to meet the additional needs of these customers. The regulator encouraged firms to consider how they can meet these needs once they have been identified.

Examples of good practice highlighted by the FCA include firms that begin product or service design by researching the needs, characteristics, objectives, and likely behaviour of prospective customers. Some firms create customer profiles to assess whether their offerings meet the needs of each profile, and others use a ‘negative target market’ concept to identify customers for whom their products or services would not be suitable.

The FCA also reviewed how firms monitor customer outcomes. While many firms track defined outcomes through routine and risk-driven reviews, the FCA found that some do not use management information (MI) to trigger targeted reviews when potential issues arise. The FCA stated that firms are required to act in good faith and take appropriate action on potential harm identified in their MI.

Good practice examples in monitoring outcomes include the use of dashboards that compile customer complaints, feedback, and queries, as well as tracking customer behaviour such as low product usage or cancellations as indicators of poor outcomes.

The FCA has opened 11 investigations into potential breaches of Consumer Duty since the rules came into effect.

These findings are relevant for UK letting agents and inventory clerks, as they highlight the importance of clear processes and ongoing monitoring to ensure the needs of vulnerable customers are met in the property sector.