Vulnerable Customers

Alan opened his talk by discussing the FCA’s concern for customers who were not being treated fairly. He asked “what price loyalty?” This subject has been raised on many occasions, throughout many industries. Recent advertisements on TV reflect that some insurers are finally beginning to understand that the loyal customer should be treated the same as a new customer and this makes good business sense. Alan went on to explain that the FCA are still seeing too many cases where loyal policyholders are being charged more premium than their new, price sensitive customers, and it these loyal customers who due to their individual circumstances, could be deemed vulnerable.
The FCA describe a vulnerable person 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.
Alan gave an example of how his friend’s mother was being charged £900 for her household insurance premium, whilst a new customer asking to join the same company was being charged £200. When challenged, the large corporate insurer/bank reduced the mum’s premium to £320, but even this did not match the price offered to a new customer.
PPI and Pension scandals, enrolment scandals and payday loans have only added to the FCA’s concerns (in some instances, customers were being charged up to an APR of 5000%!)
Vulnerability affects a great many of us, the most common categories relating to the physically disadvantaged, the elderly and those in poor mental health – an issue of increasing concern in society today. It could also relate to those who are not as IT savvy, or in poor emotional health ie those people who are upset, or from a different cultural background who may require more support. It is the insurer’s responsibility to ensure they can offer good and fair service for all groups within society.
Alan provided an example of poor practice, discussing a hard of hearing customer who eventually agreed to a policy - even though he did not understand what the call handler was saying! The customer simply couldn’t hear him and was too embarrassed to say, and he hadn’t wanted to ask the handler to repeat himself again. We are all aware of potential language barriers; those born into different cultures may not understand and agree to something they do not want. Younger customers may have a poor appreciation of risk and could be charged a higher premium as a result. Anyone can suffer from jargon blindness – and one industry’s acronym can mean something totally different in another industry.
Alan challenged the group with some worrying statistics, but followed this up with strategies for coping
• 850,000 people in the UK suffer from Dementia.
• 1 in 6 people over the age of 80 has some form of Dementia and this is set to increase. By 2025 there will be approximately 1 million people suffering from Dementia and set to rise to 2 million by 2051.
• Just under ½ of all adults have the numeracy level of an 11 year old - they wouldn’t necessarily pass the numeracy tests that their children sail through.
• 5 million people suffer from a physical disability.
• 138,000 people cannot speak English.
• ½ of all adults in the UK would not have enough money to meet a bill of £300 that arrives unexpectedly
• Almost 9 million people are hard of hearing.
Bearing those statistics in mind, Alan went through some coping mechanisms with the group, ranging from from taking time on calls to not discriminating against anyone on the grounds of disability - something not only morally wrong, but also illegal..
All firms must demonstrate to the FCA that they recognise vulnerability and have processes in place to deal with it. Insurers should make their processes easier for a customer to do business. Alan suggests we treat everyone as if they are your own mum, dad, gran and so on.
Those in customer facing roles should be able to recognise the signs, such as trigger phrases that could be a sign of vulnerability and may point to a customer requiring additional help and support. Some of these phrases maybe :-
• I can’t pay – I can’t afford.
• I’m having trouble.
• I can’t read my bill.
• I can’t understand what you have sent me.
• I can’t hold on all day.
• I am short of time.
• Asking for comments/actions to be repeated.

Treating vulnerable customers fairly and providing extra support when needed is not only good for customers, it is good for business. It ensures that insurers are compliant, reduces complaints and engenders customer loyalty.

Companies and Insurers should have a Vulnerable Customers Policy and make clear plans to provide training and support to their employees, providing them with good information to learn from.

Alan finished by reminding us that it is important to remember in an age of compartmentalism and streamlining, that “one size doesn’t always fit all.”