LiveMore has called on lenders and intermediaries to take note of the vulnerability aspect of the new Consumer Duty rules, as data shows a rise in mortgage arrears and non-payment of bills.
The later life lender, which provides products for customers aged between 50-90+, has urged the mortgage industry to be extra vigilant during the cost of living crisis, after UK Finance data showed that the number of people facing arrears was up by 7% in the last quarter, taking the figure to 81,900 borrowers.
Which? has also reported that over two million households missed bill payments in July.
Money worries is just one aspect of vulnerability, with the Financial Conduct Authority (FCA) defining a vulnerable customer as “someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care”.
In line with the new Consumer Duty rules, firms must be able to identify the potential vulnerability of a customer, which may not be immediately visible. Furthermore, customers may not consider themselves to be vulnerable.
This can be even more prevalent in the 50-90+ age range, where health can be an issue or people may have experienced a life event such as losing a loved one. LiveMore states that there is also a need to identify the capacity of people’s understanding of financial issues as they may have limited knowledge or ability with numbers, literacy or digital skills.
The lender has therefore said that all providers should look further into the future of their clients by considering their longer-term situation and what may happen as customers get older.
Chief executive officer and founder at LiveMore, Leon Diamond, said: “The introduction of Consumer Duty could not be timelier and as an industry we must all take the issue of vulnerability very seriously. More people are struggling financially, which can impact their mental health.
“Taking vulnerable customers into account at every stage of developing products and services, will help firms to meet their clients’ needs and avoid causing harm.
“It is also important to have robust processes in place to spot and respond to vulnerability, make customers aware of support available, and have systems to record and retrieve information about customer needs.”
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