The Treasury Committee has today announced a probe into vulnerable customers and how they are served by the financial services industry.
Among other things, the committee will also investigate what banks are doing to prevent financial exclusion, while also examining whether some vulnerable people are being overcharged for travel insurance.
According to Citizens Advice, some vulnerable customers are losing as much as £877 per year, because they are loyal customers.
As a result, the Financial Conduct Authority (FCA) and the Competition Markets Authority (CMA) are investigating whether some customers are being over-charged for financial products.
Commenting, AJ Bell senior analyst Tom Selby said: “Ensuring vulnerable and potentially vulnerable customers are identified and protected is one of the most important challenges facing the financial services industry today.
“While the Treasury Committee’s terms of reference mostly focus on banking and the disappearance of high-street branches, the wider sector – including advisers and pension providers – also have a huge role to play.”
Though there are some customers that are more obviously vulnerable, Selby highlighted that there is no easy way to tackle this issue, and that it cannot be resolved by any one company or industry in isolation.
“It requires broad collaboration between firms, regulators, politicians, charities and customers themselves,” he added.
“Companies across financial services need to build understanding of vulnerability into their respective cultures, sharing best practice and continually reviewing and improving the processes put in place to protect customers.”
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