The Cost of Not Treating Vulnerable Customers Fairly

Your car fails its MOT and you needed to buy a used car to get to work next week. Your salary barely covers your monthly bills, so there are minimal savings in the bank. You have a lack of credit history or a recent spell of unemployment due to ill health. Mainstream financers are not willing to lend you the money. Without a vehicle, you risk losing your job. Where can you turn?

For some people, Moneybarn provided the solution. This automotive financer helped many individuals to purchase a used car. They were the light at the end of the tunnel, yet Moneybarn has been fined £2.77million by the Financial Conduct Authority (FCA). What were they doing wrong?

Treating Vulnerable Customers Unfairly
FCA investigations found that Moneybarn had put thousands of customers on short term payment plans. There was no realistic way in which many of these customers could afford to repay the loan in the time frame. Rather than assisting customers in their hour of need, they were pushing them into greater debt.

The FCA also stated that the company had failed to clearly communicate the consequences of customers not keeping up with payments. Over 1,400 customers defaulted. There was never any chance that they would clear their arrears in the allocated time frame.
The nature of the business meant that a high percentage of the customers were in a vulnerable position when they approached Moneybarn. Rather than treating them fairly and helping them, the company made their financial situation worse. The outcome had a negative impact on many.

The company now face a £2.77million fine. This would have been considerably higher, however, Moneybarn accepted the findings. The company took action and paid £30million in compensation to customers that had been affected.

Customer Service Excellence for All
None of our businesses would exist without our customers. It is therefore essential that we value every individual who uses our services or purchases our goods. Our goal should be to be of worth to them, no matter what their age, abilities or situation.
The majority of your customers may be able to use your app, visit your premises, read information and make informed decisions, but not all. None of us is immune to needing a little extra attention and support at times.

Some of your customers may only be able to access your services if you invest a little more time and effort than usual. These are your vulnerable customers. Their vulnerability may be short-lived; recently bereaved, a stressful day or they’ve left their glasses at home. Their vulnerability could be more permanent; not digitally competent, a disability or in an abusive relationship.

What currently happens if customers are unable to follow the standard procedure?
Do your processes and policies help those in greatest need or make things even more difficult for them?

Become a Haven for Vulnerable Customers
Are you driven by FCA regulations and keen to avoid a substantial fine? Is your organisation an advocate for customer service excellence? Either way, it is important to address the needs of vulnerable customers.

A good starting point is a detailed audit of your current provisions. This helps you to identify what is already in place, as well as where there may be gaps. For companies in the financial industry, a Vulnerable Customer Policy, staff training and regular monitoring are also required.

As a specialist in Vulnerable Customer Service, Helen Pettifer Training has prepared a series of downloadable resources. These compliance documents include an Audit document. There is a Vulnerable Customer Policy, which you can tailor to best suit your organisation. We also provide in-house and online Vulnerable Customer training.
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We designed these resources to help any organisation to deliver customer service excellence for all. For those in the financial industry, working through the resources and embedding the learning in good practice will help you to avoid a damaged reputation and a substantial fine.
If you have any questions relating to supporting Vulnerable Customers, please email info@helenpettifer.com