The aim of this policy is to outline the practice and procedures for staff in TAFCO LTD to contribute to the prevention of detriment to clients who find themselves in vulnerable circumstances.
Much of the consumer protection legislation is underpinned by the notion of the ‘average’ or ‘typical’ consumer, and what that typical consumer might expect, understand or how they might behave. However, consumers in vulnerable circumstances may be significantly less able to represent their own interests, and more likely to suffer harm than the average consumer. TAFCO LTD need to ensure these consumers are adequately protected.
The Financial Conduct Authority (FCA) define vulnerable consumers as: “A vulnerable consumer is someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.” (Occasional Paper No. 8: Consumer Vulnerability – Published 23/02/2015)
Vulnerability can come in a range of guises, and can be temporary, sporadic or permanent in nature. It is a fluid state that that needs flexible and tailored responses. Many People in vulnerable situations would not diagnose themselves as ‘vulnerable’.
Customers who might be considered as being in vulnerable circumstances could include:
- Customers with mental capacity deficiencies (including language or communication)
- Customers who are not financially sophisticated in their understanding
- Customers with low incomes
- Customers who are already in financial difficulty
- Identification of Vulnerability
The identification of a vulnerability can be hard to spot, it may not be as simple as a customer’s verbalising or physically showing signs. It can be within subtleties of body language or what is not being disclosed. Due to the size of Tafco LTD, it falls to each individual to remain vigilant and aware at all times of the possibility of their customer being in a vulnerable circumstance. Below is for example only and is non-exhaustive.
Mental capacity limitations: Any customer who has a mental capacity limitation must be treated with extra care. This does not mean that Tafco Ltd cannot continue to conduct business, simply the methods taken must change to ensure the customer’s capacity does not impede their understanding and decision-making skills.
Companies may use the DMHEF Form – http://www.malg.org.uk/debt-and-mental-health-evidence-form-version-3-for-advisors-case-work/ if consent to speak with a carer, for example, is required.
Understanding their financial market: Customers may display clear signs of not understanding, this could be asking to repeat a statement numerous times, simply agreeing without seeming to question, or lacking the ability to make sound judgements based on the information provided.
Customers with low incomes: Customers with a low income may be more susceptible to accepting any deal offered to them, rather than searching the market. Lower income families may be searching for a form of credit to supplement their salaries.
Customers that are already in debt for amounts which they cannot afford to comfortably repay when they fall due. This could be subject to additional issues and medical conditions.
TEXAS, IDEA and CARERS drills
The Royal College of Psychiatrists and Money Advice Trust have developed three protocols
which are practical tools to assist staff in dealing with conversations around vulnerability.
The TEXAS protocol can help all frontline staff manage disclosures effectively which is a key
part of creating an organisation where customers are confident to disclose. It can be used as a
training tool for managing initial conversations.
T – thank the customer
E – explain how their information will be used
X – explicit consent to the use of their data
A – ask three key questions
- Does your mental health problem make it difficult to repay your finance, If so, how?
- Does your mental health problem affect your ability to deal or communicate with us? If so, how?
- Does anyone need to help you manage your finances such as a carer or relative? If so, how?
S – signpost to internal or external help, where this is appropriate
The IDEA protocol can be used by specialist staff to help structure and manage more in depth
conversations, ask the right questions, and identify relevant information.
Impact – staff should ask what it is that the mental health problem either stops the customer doing
(in relation to their financial situation), or what it makes harder for them to do. This will help
provide insight into both the severity of the condition, and its consequences.
Duration – staff should discuss how long the customer has been living with the reported mental
health problem, as the duration of different conditions will vary. This can inform decisions
about the amount of time someone needs to be given to retake control of their situation.
Episodes – some people will experience more than one episode of poor mental health in them
lives. You will need to take such fluctuating conditions into consideration and asses what impact this has on a customer’s decision making.
Assistance – You should consider whether the customer has been able to get any care,
help, support or treatment for their condition. This may help in relation to collecting medical
Throughout, creditors should keep in mind not only the commercial outcomes they wish to
achieve, but also the steps that would bring about better customer outcomes for their health
and financial wellbeing.
This drill was developed to assist with handling disclosures from carers to ensure that helpful
information is not lost due to staff concerns about data protection.
– if the carer can supply evidence of their authority to act on the customer’s behalf, a more
detailed discussion can be arranged once this is received
– if the carer cannot supply this evidence, or needs to share information about the
customer now, the following steps should be taken:
- Avoid discussing any account details, making sure to explain to the carer why this isn’t possible.
- Reassure the carer that their concerns can be recorded as observations (unverified) on the customer’s account, and these can be considered.
- Explain to the carer that their observations will need to be shared with the customer, colleagues, and potentially any clients. Carers will need to give their consent for this.
- Record the carer’s observations, listening carefully, and ensuring:
– you have checked why the customer is unable to speak directly with the creditor about
these issues (is there, for example, a communication issue?)
– you are clear how the customer’s mental health problem affects their ability to repay
– you have confirmed with the carer what information has been recorded, and how long
these unverified observations will be held on file while they are being checked.
- Summarise the available next steps, which might include:
– you (or a colleague) speaking with the customer concerned to establish if there is a
problem, including checking the unverified observations made by the carer
– the carer discussing with the customer a potential mandate to act on their behalf
– the carer and customer working together to collect supporting medical evidence.