Glossary term
Vulnerable Customers
Subject: Compliance and Regulation, Conduct and Consumer Protection
Also known as: Customer Vulnerability
Vulnerable customers are people who, because of their circumstances, are more likely to suffer harm or less able to look after their own interests when dealing with a firm.
Explanation
Vulnerability is a state, not a label for a group, and it can be temporary. Causes include ill health, disability, bereavement, job loss, caring duties, low literacy, language barriers, age and limited digital skills. Some regulators group the drivers into four: health, life events, low resilience and low capability. Firms must spot the signs, adjust how they communicate, offer extra support and avoid selling unsuitable products. Practices include trained staff, flags on customer records (kept in line with data protection law), simpler documents, extra time, trusted contact arrangements and careful collections. Rules appear in conduct regimes in the UK, Australia and elsewhere, and in sectors such as energy and telecoms. Supervisors reading complaint files look for whether staff noticed the signs and changed what they did, not whether a form was ticked.
Example
A call-centre agent at an energy supplier notices that a customer with an overdue bill is confused and mentions a recent bereavement. The agent follows the vulnerability procedure: asks permission to note the circumstances on the account, pauses collections, offers a payment plan and arranges for letters in large print. A supervisor checks the case later to confirm the response was proportionate.
Not to be confused with
- Protected characteristics
- Protected characteristics are fixed legal categories such as sex or race; vulnerability depends on circumstances and may be temporary.