New report on Consumer Vulnerability calls for inconsistencies across sectors to be addressed

The Credit Services Association (CSA) has published a discussion paper “Vulnerability: The Inconsistency Problem” taking stock of the changing landscape of vulnerability policies pursued by different organisations and sectors across the UK, looking in particular at:

• Definitions of vulnerability and how these are evolving
• How customer vulnerabilities can be recorded and issues around data protection and sharing
• Whether vulnerabilities ought to be evidenced by customers or self-identified
• Differing levels of regulatory enforcement
  

The discussion paper then seeks views from practitioners on a series of key questions including:

• Where are the most significant gaps between sectors in terms of the treatment of vulnerable customers?
• Are there viable solutions for reducing the burden of reporting for consumers?
• What does the best practice of the future like?

The Credit Services Association recommends that all regulators should be clearer and more consistent about consequences for failure to provide appropriate treatment to vulnerable customers and calls on the Government to likewise adopt the same standards within its own jurisdiction.

Report author and CSA Head of Regulatory Impact Daniel Spenceley said: “Helping those with vulnerabilities is thankfully a far more prominent priority for most service providers and sectors these days. But there are still big differences between utilities, financial services, SMEs and the public sector – which makes it a complex task for organisations and customers who interact across all these boundaries. 

“We want to encourage policy-makers and regulators to raise their sights and look at how other services treat those with vulnerabilities, because at the very least they might learn lessons about good practice. Not all services are the same, and different types of vulnerability need to be prioritised by different creditors, especially if the ceasing of a service would be particularly detrimental. We hope that this discussion paper can help stimulate new policy thinking that raises standards across the board.” 

The advent of the FCA’s Consumer Duty has provided a new environment for firms to look more closely at consumer needs and vulnerabilities in the financial services sector, but Consumer Duty does not extend to sectors beyond financial services. Feedback to the discussion paper will be used to inform how the CSA supports and works with members and stakeholders in the quest for better alignment in vulnerability practices.

Spenceley added: “We are keen to hear the thoughts and experiences of members and stakeholders alike about the specific challenges they encounter as a result of inconsistent approaches to vulnerability, and how they believe these challenges can be best overcome.”

Notes:
The Credit Services Association (CSA) is the only National Trade Association in the UK for organisations active in the debt collection and debt purchase industry. Our membership employs nearly 11,000 people, holding over £20bn of consumer debt for collection last year, across over 20million accounts. And they held nearly £4bn of commercial debts in over 1.5million commercial accounts. As the voice of the collections industry, our vision is to build confidence in debt collection by making the entire process clear, easy to understand and less stressful for all those involved. Further information on the CSA can be found at www.csa-uk.com.