Millions of vulnerable customers were not able to contact one or more of their financial services providers in the 12 months to May 2022, according to the Financial Conduct Authority.
The watchdog said 7.4 million people unsuccessfully attempted to contact one or more providers, with the most vulnerable in society most likely to struggle.
The figures, taken from the FCA’s latest Financial Lives Survey, found that less than half of UK adults, or 21.9 million people, had confidence in the UK financial services industry and just 36% agreed that most financial firms are honest and transparent in the way they treat them.
Sheldon Mills, executive director, consumers and competition at the FCA, said: “Times like this show why it’s important people get the support they need as more people are likely turning to their financial services providers for help.
‘Our Consumer Duty will guide our ongoing work to improve the way firms provide customer support – getting through to your provider is the starting point for receiving help, so we will be working with them to improve in this area.”
The Consumer Duty, set to come into force on 31st July, will require firms to provide helpful and responsive customer service and equip their customers to make good decisions through communications people can understand, provided at the right time.
Simon Kew, head of market engagement at Broadstone, said: “Gaining and keeping consumer’s confidence is integral to a well-functioning financial services industry. Firms need to invest in a culture of positive customer experience, excellent service levels and outstanding administration.
“The inbound Consumer Duty seeks to embed these values across the industry but financial services firms should proactively be looking at ways they can support their customers in tricky economic times.
“We expect the treatment of customers to be a huge reputational issue for firms over the next few years. Those that get it wrong should prepare for the commercial consequences of consumers draining away in search of more respectful alternatives.”
The Financial Lives Survey also reports that adults with one or more characteristics of vulnerability were more likely to report that customer support services did not help them at all. A fifth (20%) of those with low financial resilience and 20% of those with low capability reported that provider communications did not help at all, compared with 12% of those with no characteristics of vulnerability.
Jenny Davidson, commercial proposition director at Quilter, said: “The Consumer Duty has thrust client vulnerability into the spotlight again and today’s data from the FCA shows that the sector continues to let down the most vulnerable in society.
“Vulnerability can be a deeply personal issue. Customers are unlikely to shout about it or may be unwilling to discuss it, so a crucial challenge for all companies is to identify customers on this spectrum of risk. All employees of financial services firms must have the skills and capability to recognise and deal with customers who display signs of vulnerability, and the FCA has previously provided guidance on embedding fair treatment of vulnerable customers across businesses.”
Davidson added: “Not all customers with characteristics of vulnerability will be vulnerable. There are incidents of transient vulnerable people who, because of specific circumstances at a certain time, may not be able to make a complex decision. Navigating financial choices whilst displaying a characteristic of vulnerability may at times feel like an insurmountable challenge, and it is vital that firms do all they can to help people easily navigate their money choices.”
