The events in the past few years with Covid-19, foreign wars, and the rising cost-of-living crisis have highlighted the realities of vulnerability.  

Vulnerable customers – and the need to ensure they are protected and treated with care – is not a new concept. The obvious example likely to spring to mind is of older customers being given the runaround by telemarketers. But the message we all need to hear loud and clear today is that although it is still important to protect those who fall under an obvious vulnerable category, things are never quite that black and white.  

According to the Financial Conduct Authority (FCA), in its Guidance for firms on the fair treatment of vulnerable customers, the regulator views vulnerability as a “spectrum of risk.” The key thing here is that, as the report continues, “all customers are at risk of becoming vulnerable, but this risk is increased by having characteristics of vulnerability.” 

Covid-19 was a real teaching moment in this sense. The population was suddenly faced with a universal stressor, which manifested in many ways. Some felt the pinch on their pockets as personal finances and businesses took a hit, others of course were affected in terms of their physical health, and across the board, the mental toll was a serious one.  

Any of these factors could result in a vulnerable customer, even if only temporarily.  

The rising cost of living is only going to compound this, with financial concerns – and their mental and physical health ramifications – taking their toll and leaving more people in difficult circumstances.  

Some of these situations, or stressors, might be alleviated with the right financial product or a change in the approach to reach the right outcome for the customer. For others, however, borrowing will not be the right answer, no matter how appealing it might seem in the short term.  

The importance of investing in infrastructure to better identify and understand the impacts that affect each and every customer, that may become vulnerable, is key to ensuring that we lend responsibly, fairly, and ethically.  

To this end, at Pepper Money, we have worked hard to embed these practices into our everyday.  

This includes enhancing our methods of checking and identifying potential vulnerabilities via our brokers, as well as revising our direct customer interactions to encourage the handling of these concerns.  

Our origination platforms have been enhanced to capture and communicate vulnerability considerations. We have rolled out guidance and training across the business to help support customers and implemented feedback loops to gain insights from both brokers and customers.  

So, vulnerability awareness is not an alarm that should go off when a customer fits a certain profile but sits dormant the rest of the time.  

Instead, it should be factored into all of our conversations, as standard. Only when it is part of the fabric of our work as financial advisers, brokers, and providers, can we be sure of treating our customers fairly.  

While we, as a lender, have lots of ways to bring vulnerability consideration into every deal, it is just as important for brokers to develop strong relationships with their customers, ask probing questions, and keep an eye out for any changes or potential triggers, so we can work together for the best outcome. 

Here at Pepper Money, supporting our customers with vulnerability is not just something we talk about, it is something we do, to help people succeed.