Vulnerable Consumer Policy

1.0 INTRODUCTION

Ensuring that customers in vulnerable circumstances are treated not only fairly, but with empathy and sensitivity to their circumstances is a growing priority for the Financial Conduct Authority and other regulators. Vulnerable clients are likely to need additional assistance at some stage in order to avoid detriment (financial or psychological) when attempting to arrange insurance. The purpose of this policy is to ensure that the way in which we conduct our business does not have a negative impact on vulnerable customers.

A vulnerable consumer is defined as someone who has personal circumstances that place them at a higher risk of detriment, particularly if a company does not act with the appropriate level of care.

LBH is committed to ensuring that all its staff are capable of identifying vulnerable consumers, and that they are able to handle a situation involving a vulnerable customer with the required levels of care, attention and respect. A consumer may find it difficult to make an informed decision about their available options for a variety of reasons. The risk factors that contribute to consumer vulnerability in financial services include:

low literacy, numeracy and financial capability skills
physical disability
severe or long-term illness
mental health problems including common mental disorders (CMD)
low income and/or debt
caring responsibilities (including operating a power of attorney)
being ‘older old' for example over 80, although this is not absolute (may be associated with cognitive or dexterity impairment, sensory impairments such as hearing or sight, onset of ill health, not being comfortable with new technology)
being young (associated with less experience)
change in circumstances (e.g. job loss, bereavement, divorce)
lack of English language skills
non-standard requirements or credit history (e.g. armed forces personnel returning from abroad, ex-offenders; care-home leavers, recent immigrants).

Living with a disability, illness or diagnosis does not in itself make someone vulnerable. In the context of financial services , it is the person's situation and barriers to accessing such services that may make them vulnerable. Equally a person may be vulnerable without any disability, illness or diagnosis, for example if they are recently bereaved or frail.

2.0 IDENTIFYING VULNERABLE CUSTOMERS

For LBH staff to correctly address the needs of a vulnerable consumer, it is important to be able to identify them.

Risk factors that can help to identify a vulnerable consumer include illness, disability, illiteracy, bereavement and other impairments as indicated above. the client may have indicated a vulnerability in correspondence or one or more of the following indicators may become apparent during a telephone conversation or meeting. key indicators that often highlight a risk factor include :

Can the client hear everything you are saying and do they understand what you are saying? Do they ask you to slow down or to speak louder? Are you sure they have heard and understood all the relevant details? Do they ask you to clarify any details or advise they do not understand terminology being used
Does the client stay on topic and hold a conversation that is coherent, or do they appear distracted or confused? Do the clients responses remain relevant and are their questions typical for the discussion being had?
Does the client take an unusually long amount of time to answer a question that suggests they are struggling to process the information provided to them?
Does the client indicate they may have a disability or impairment based on their voice, pronunciation, breathing, hearing or ability to understand the conversation? Are they coherent and fluent in the language being used?

3.0 DEALING WITH VULNERABLE CUSTOMERS

Just because somebody is vulnerable does not automatically mean that they are unsuitable for the products and services the firm supplies. As soon we think we may be engaging with a vulnerable consumer we should take care to adhere to the requirements set out in this policy.

When dealing with vulnerable consumers staff must remain aware of the following guidelines:

Remain patient and empathetic; do not rush the client, interrupt or appear impatient. Allow the consumer to arrive at their own decisions and process the information sufficiently.
Ensure the client is able to hear and understand what you are saying; ask the client to explain their understanding of what you are telling them, or include questions as frequently as possible to ensure they are aware of and understand what is being discussed.
Allow the client to explain thoroughly; do not assume you already know what their requirements or needs are, and do not finish off their sentences which often implies you are rushing them to progress the conversation. Listen carefully to the client and remain conscious of any absence of understanding, hints at unawareness, or forgetfulness of topics already discussed.
Clarify that the consumer is comfortable with the standard and method of communication, and offer to provide details in an alternate format such as via post or email for clarity. Before acting on a vulnerable consumer's advice, ask if there is anybody else they need to speak to about their decision.

When a vulnerable customer has been identified a relevant note should be added to their record ensure awareness extends to all staff within the company who deal with the client. It is important that we maintain a consistent level of service, and that a vulnerable consumer receives adequate care irrespective of which staff they liaise with. Any such notes should describe the reasons for the assessment of the customer as vulnerable and be respectful.

Mental capacity

Mental capacity relates to the ability of the individual to understand and to retain and evaluate relevant information in order to be able to make a decision based on that information.

In the event that a member of staff believes that a vulnerable consumer is unable to make a decision for themselves regarding their insurance, they should attempt to identify a carer or next of kin who is authorised to act on their behalf with respect to their financial affairs. in many cases, a parent or spouse will represent the interests of the vulnerable consumer. All staff members who deal directly with clients, regardless of department or position, must familiarise themselves with this policy and ensure they understand it completely.

Product literature

It is acknowledged that there are limits to what we can reasonably do to form a view as to whether or not a customer has, or may have, some form of capacity limitation. However, it is good practice, in product literature provided to customers prior to providing a relevant product or service, to invite customers to disclose (on a voluntary basis) whether there are any issues relating to their health or general well-being which may be relevant to the consideration of any product or decision by the firm. Any such invitation should make clear that the information provided will be used solely to facilitate an informed service being provided.

If a customer provides information which indicates that he does, or may, have some form of mental capacity limitation that might impact on his ability to make an informed decision, this should not lead to him automatically being denied access to the product or service being sought. It should act as a trigger for us to consider what reasonable steps might be taken in order to amend our usual processes to ensure that the customer is treated fairly and a positive outcome results for the customer.

Version 1 22.05.23