Consumer vulnerability

Vulnerability is an issue that can – and likely will – affect most of us at some point in our lives. It can be temporary, sporadic or even permanent in nature; it can be unpredictable, and may change over a period of time. The Financial Conduct Authority has developed the following definition of a ‘vulnerable consumer’ to inform its work:

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. [1]

Vulnerable personal circumstances may include (but are not limited to):

  • experiencing health problems (either physical or mental, short term or long term);
  • emotional distress or bereavement;
  • having a physical disability;
  • having a limited understanding of English or having low basic skills;
  • suffering from an addiction, or
  • being a carer for someone with a range of conditions.

Financial services play a significant and essential role in all of our lives, and as consumers and citizens we are expected to take greater responsibility for our personal finances and ensuring our own financial wellbeing. In an increasingly financialised society consumers in vulnerable situations are often more at risk when dealing with financial service providers, and are more likely to suffer detriment than the notional ‘average’ person.

While some examples of good practice exist, many financial services providers are not serving consumers in vulnerable situations consistently or, in some cases, fairly. Policy makers and providers have a duty to ensure that all consumers are adequately served and protected, and therefore ensuring that vulnerable consumers are treated fairly, consistently and with sensitivity has become a growing priority for regulators and the financial services industry alike.

  1. Our current research on helping people in vulnerable situations
  2. Publications

[1] Coppack, M., Raza, Y., Sarkar, S., and Scribbins, K. (2015). Consumer vulnerability. London: Financial Conduct Authority

Edit this page