Working with vulnerable customers: A best practice guide

Over the last few years, there has been an increasing level of focus on the service provided to customers in vulnerable circumstances, with a view to improving customer experience and the longer term outcomes achieved.

In the first of a series of short blogs, aimed at helping organisations to improve identifying, supporting and assisting vulnerable customers, we take a look at how the FCA defines a vulnerable customer and how businesses are able to identify vulnerability.

The FCA describes “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.”

Customers in vulnerable circumstances may be less likely to be able to manage their finances effectively, and much more likely to experience detriment due to financial abuse or fraud. It is critical that you handle relationships with sensitivity, understanding, and flexibility to support customers in working through difficult circumstances and to ensure that the situation is not worsened by your actions.

Customers may be reluctant or unwilling to disclose issues to your organisation so you need to be able to identify risk factors that may indicate vulnerability.

• engagement with front line advisors in branches/call centres. Front line advisors should be appropriately trained to ensure customers are treated sensitively and with empathy. They should listen and use questioning techniques to discover and understand the customers’ circumstances.
• written communication from the customer or a third party providing notification of an issue. letter, email, secure message, etc.
• assessment of behavioural risk indicators. This could include increasing value of credit card cash advances, reducing level of payments, frequent returned payments or informal overdrafts, etc.
• notification by a third party such as friend/family member, debt advice provider/debt management company, solicitor, etc.

You may try to ensure that customers are not incorrectly identified as vulnerable, but it is important that your policy isn’t too rigid so as to miss customers requiring support. It is better to pass a customer to a specialised team where not required, than to risk worsening a situation by failing to identify a customer currently in a vulnerable position.

In the second of a series of short blogs, aimed at helping organisations to improve identifying, supporting and assisting vulnerable customers, we take a look at how you can support vulnerable customers and how to best manage the process internally.

1. Once identified a vulnerable customer should be removed from mainstream sales/marketing and collections activity
   It is important that a customer identified as being in vulnerable circumstances is ‘flagged’ as such so they are excluded from mainstream activity, especially in relation to sales/marketing and collections actions. This will provide you with an organisational memory of the customer without the need to explain the situation to different areas of your business. Care needs to be taken with the level of information shared internally and explicit customer consent obtained where possible.
2. Specialist teams should be in place to speak with the consumer
   Customers should be handled by specialist teams with the expertise to engage with the customer. They must understand the need for flexibility and have authority around terms and conditions to address the needs of the customer, (for example, through payment holidays, interest only periods, debt re-structuring, etc). Discussions should always be through the customers preferred channel, and clear and concise information and explanations should always be provided.
3. Appropriate external support, should be clearly signposted
   Where available charities and agencies specialising in helping people in vulnerable circumstances should be identified where help and advice is required over and above what can be provided by your organisation.

It is recommend that you gain feedback to help with improvement of your policies and processes, and to understand the way they are being interpreted and implemented within your business. This should be both qualitative and quantitative in nature and supported with regular reviews into customer contacts, management of cases, and outcomes.

In the third of a series of short blogs, aimed at helping organisations to improve identifying, supporting and assisting vulnerable customers, we take a look at how you can provide your employees with the right tools to communicate effectively.

Top training tips:

1. Front line employees must be comfortable and confident in engaging with potentially vulnerable customers
   Regular training on your policy and procedures in handling potentially vulnerable customers is key.
   Front line employees should know when and how to pass customers over to internal specialist support teams, and have an understanding of the regulatory framework which govern these interactions. Discover more in our previous blog: How to support vulnerable customers
2. Focus on developing and enhancing their listening and questioning skills
   Customers in vulnerable circumstances are often reluctant to pro-actively disclose details of their circumstances, due to the highly personal and sensitive nature of the issues. Effective listening and questioning skills are important to enable potential issues to be detected and explored, whilst providing reassurance and support to the customer. These skills should be combined with use of a structured assessment framework to encourage disclosure, to ensure next steps are clear, and to accurately capture information gathered.
3. Create a culture of sensitivity and empathy when speaking with potentially vulnerable customers
   In addition to ensuring an appropriate level of training is undertaken, it is equally important that there is a culture of sensitivity and empathy in dealing with customers potentially in vulnerable circumstances. This will help to facilitate a more positive customer experience, and will be more likely to result in a positive outcome.

Supporting your specialist team working with vulnerable customers:

1. Specialised teams handling vulnerable customers should be free from targets relating to call handling time
   By not having targets this will provide employees with the flexibility to engage in detailed discussions as appropriate to the customer circumstances.
2. Make aware the range of options available to support customers and review cases
   Your specialist team should be empowered to action the support options available. E.g. interest rates, waiving of fees/charges/interest accrued, consolidation of debt, etc.
   Regular reviews of cases should also take place so your organisation is aware of any further changes to customer circumstances. This will help further identify appropriate actions and support required response to an improvement or further deterioration in circumstances.
3. Provide ongoing focus on staff wellbeing
   Due to the nature of discussions that can take place this may potentially have an impact on employees, and so organisations should provide regular one to one discussions with line managers. Best practice is to provide a support framework for specialist staff, from allowing the flexibility for individuals to take a ‘time out’ after a difficult discussion, to offering support and counselling where required, to enabling staff to easily move to other roles within the business if the employee no longer wishes to work within such an emotionally challenging, high pressure area.

Group discussion should also be encouraged to enable knowledge sharing and identification of areas of potential improvement.

In the fourth of a series of short blogs, we take a look at the key ingredients needed to improve the way you work with vulnerable customers, from identification, verification, and support.

1. Focus on how vulnerable customers are handled
   This will lead to ongoing improvement in customer experience, with customers feeling their needs are listened to and responded to by the organisations with which they hold relationships. Flexibility to tailor solutions to individual customer needs will improve outcomes, with customers being supported through challenging and difficult circumstances.
2. Work with business consultants
   Specialist credit risk and financial crime prevention practitioners with banking and financial services experience can provide an industry best practice view to support your business in identifying and implementing improvements in the assessment and management of vulnerable customers.
3. Implement solutions to support with assessing, identifying, engaging, and supporting customers experiencing financial vulnerability
   Credit risk and affordability solutions can help to identify potentially financially vulnerable consumers, validate income, and determine the customer’s capacity to repay. Solutions that offer daily alerts can provide early insight into significant changes in a customer’s financial circumstances, enabling early engagement and intervention.
   Integrated collections data can provide advisors with rapid access to key information on a customer’s financial position, enabling the advisor to assess income and expenditure levels and agree a sustainable long term solution with the customer.
   There are tools available that can be used to profile and identify potentially vulnerable customers, flagging them for pro-active action, or could be used to perform a detailed assessment of a customer. Recommendations for suitable solutions, such as loan re-scheduling, payment holidays, etc. can also be made.
   Omni-channel customer engagement solutions can provide a true end to end solution in assessing, identifying, engaging, and supporting customers experiencing financial vulnerability.
4. Encourage consumers to take control of their financial passport
   Consumers can access their credit score and credit report fee for life from companies like Credit Karma. This will provide visibility and insight into their current financial position.