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Vulnerable Customers

At Hinckley and Rugby Building Society we are committed to ensuring that all customers receive fair, appropriate, and consistent support, particularly those who may be vulnerable due to their personal circumstances.

The UK Finance Vulnerability Principles state that at the point of mortgage application, the consumer is a customer of the broker and an applicant to the mortgage lender. The applicant becomes a customer of the mortgage lender following completion of the mortgage.

As intermediaries, you play a critical role in the customer journey, acting as the bridge between us and your clients. This gives us a unique opportunity, and responsibility, to identify, support, and advocate for individuals who may be especially susceptible to harm, misunderstanding, or disadvantage when accessing financial products and services.

Understanding customer vulnerability

Certain personal circumstances can make customers more vulnerable, meaning they may have different or additional needs. These vulnerabilities can limit their ability, or willingness, to make informed decisions, exercise choice, or advocate for themselves. As a result, they may face a greater risk of harm, especially when things go wrong.

Vulnerability can affect anyone at any time. Whether it stems from health conditions, life events such as bereavement, low financial resilience, or limited understanding of complex products, it is essential that we treat each customer’s needs with empathy, professionalism, and care.

This guidance outlines how you can identify and respond to vulnerability in your day-to-day interactions, ensuring your processes, communications, and services deliver good outcomes for all. The approach aligns with the FCA’s expectations under FG21/1 and the Consumer Duty, helping you to maintain trust, meet regulatory obligations, and support the long-term wellbeing of your clients.

FCA definition of a vulnerable customer

According to the FCA, a vulnerable customer is someone who, due to their personal situation, is particularly susceptible to harm, especially if a firm fails to act with the appropriate level of care. Vulnerability is not fixed; it exists on a spectrum, and any customer can become vulnerable at any time.

Vulnerability drivers

The FCA identifies four key drivers of vulnerability – factors that can increase a person’s risk of harm when interacting with financial services. These drivers are often interconnected and can be temporary, sporadic, or permanent.

Health

Physical or mental health conditions or disabilities that impact a person’s ability to carry out day-to-day tasks or make decisions. Examples include: long-term illness, mental health challenges (e.g. anxiety, depression) and cognitive impairments (e.g. dementia).

Life events

Major life changes or crises that affect emotional resilience, decision-making, or financial stability. Examples include: bereavement, divorce or relationship breakdown, becoming a carer, and job loss or redundancy.

Resilience

A person’s ability to cope with emotional or financial shocks. Examples include: low or unstable income, high levels of debt, and lack of support network or coping mechanisms.

Capability

Low knowledge, skills, or confidence in managing financial matters or understanding complex information. Examples include: low literacy or numeracy, limited digital skills, and lack of financial experience or understanding.

Why it matters

Understanding these vulnerability drivers helps firms to identify when customers might need additional support and to tailor services to reduce harm and improve outcomes. Vulnerability can be:

Temporary – such as someone grieving a loss or recovering from illness.
Situational – like someone dealing with job loss, domestic abuse, or a natural disaster.
Long-term or permanent – for example, someone with a long-term disability, mental health condition, or age-related challenges.

Importantly, anyone can become vulnerable, vulnerability is not always visible, and people may not realise or disclose that they’re in a vulnerable situation.

FCA expectations for intermediaries in supporting vulnerable customers

The FCA expects intermediaries to take proactive steps to identify and support vulnerable customers, aligning with its Principles for Businesses, which emphasise fair treatment for all consumers.

Clear communication: All communications should be easy to understand, tailored to the needs of the target audience, including those with limited literacy or cognitive challenges.

The FCA is committed to ensuring all consumers – especially those in vulnerable circumstances – are treated fairly, respectfully, and with care.

Having a vulnerability will not have a negative impact on your client’s application. This will enable us to support the client as much as we can now, and in the future.

Identified a vulnerability? Please get in touch

If a vulnerability has been identified and your client is happy for the information to be shared with us, please email our broker assist team brokerassist@hrbs.co.uk or call 01455 894736.

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