Vulnerable Consumers Policy
The purpose of this policy is to ensure that the employees of the company take extra care when dealing with vulnerable customers and do not have any negative impact upon vulnerable consumers.
Identifying a vulnerable consumer
A vulnerable customer is a customer who is over 18, but who is, or may be unable to take care of themselves, or protect themselves against any significant visual or hearing problem, or are old and/or frail.
What to do if we are engaging with a vulnerable consumer
What is mental capacity?
Mental capacity is a person’s ability to make a decision. Whether a person has the ability to understand, remember, and weigh-up relevant information will determine whether he is able to make a decision based on that information. The person will also need to be able to communicate his decision.
The mental capacity of a person may be limited in a way which prevents him from being able to make certain decisions because of an impairment of, or disturbance in the functioning of, his mind or brain.
Mental capacity is always defined in relation to a specific decision at a specific time.
Consequently, when considering an application for a product, or change in product factors, the Firm should take account of the customer’s circumstances at the time at which the application or request is made.
The Firm should take appropriate steps to identify whether the customer appears able to understand, remember, and weigh-up the information and explanations provided to them, and, when having done so, make an informed decision.
Mental capacity limitations can be either permanent or temporary (including fluctuating over time).
Consequently, the fact that a person may not have had the mental capacity to make a decision in the past, does not necessarily mean that they currently do not have, or will never have, the capacity to make such a decision.
Mental capacity limitations may also be partial. Under such circumstances the person concerned is likely to be able to make certain decisions but not others. Decisions, that may require the understanding, remembering and weighing-up of relatively complex information, are likely to be more challenging for many individuals with mental capacity limitations than more straightforward spending decisions.
Amongst the most common potential causes of mental capacity limitations are the following (this is a non-exhaustive list):
A customer may be understood to have, or suspected of having, any of these (or other) conditions which are potential causes of mental capacity limitation (for example, a mental health condition) – but that does not necessarily mean that they do not have the mental capacity to make an informed decision.
In some instances, it may constitute disability discrimination for the purposes of the Equality Act 2010 (EA) to decline a customer’s application for a product on a presumption that he doesn’t have the mental capacity to make a decision based solely on the knowledge that he has a condition of the type listed above
Mental capacity is not the same as financial literacy
– although, in practice, it may often be difficult for the firm to differentiate a limitation of one from a limitation of the other. In terms of a limitation of mental capacity, the customer has some impairment of mind or brain function.
There are only likely to be limited circumstances in which the firm will have substantive evidence that a customer has such an impairment and, in the absence of such evidence, can reasonably be expected to (proactively seek to) establish whether a customer has such an impairment of mind or brain function.
In the alternative, a limitation in financial literacy is likely to result from inadequate financial education rendering a customer unable to, or feeling insufficiently empowered to, manage his finances, engage confidently with firms, and make informed financial decisions.
Those with limitations in financial literacy and those with limitations in mental capacity can both be classified as groups of actual or potentially ‘vulnerable customers’ by their respective limitations. Given that customers with either form of limitation (or both forms) might have difficulty making informed decisions – rather than taking steps with a view to seeking to differentiate between the two categories of persons the firm will apply its vulnerable customer’s policy in both circumstances.
While acknowledging that there are limits that the firm can reasonably be expected to go to in seeking to form a view as to whether or not a customer has, or may have, some form of capacity limitation, it is good practice in literature provided to customers prior to providing a product or service to invite customers to disclose (on a voluntary basis) whether there are any issues relating to their health or general well-being which may be relevant to the consideration of any product or decision by the firm.
Any such invitation should make very clear that the only purpose such information would be used for would be to better facilitate an informed service being provided.
If a customer provides information which indicates that he does, or may, have some form of mental capacity limitation that might impact on his ability to make an informed decision, this should not lead to him automatically being denied access to the product or service being sought.
It should act as a trigger for the firm to consider what reasonable steps might be taken to amend its ordinary processes to ensure that the customer is treated fairly and a positive outcome results for the customer.
Measures processed to date…and counting
Credit is provided by Ikano Bank AB (publ) and available subject to status to UK residents aged 18 or over. Acrobat acts as a credit broker not a lender and offers credit products for Ikano Bank AB(publ) only. Ikano Bank is authorised in Sweden by Finansinspektionen, the regulator for banks in Sweden, and is subject to limited regulation by the Financial Conduct Authority. Ikano Bank is a trading name of the UK branch AB Ikano Bank (publ), which is registered with branch number BR016253. The registered office of the UK branch Ikano Bank AB (publ) is Waterfront House, office of the UK branch Ikano Bank AB (publ) is Waterfront House, Waterfront Plaza, Station Street, Nottingham, NG2 3DQ.