Twelve Days of Consumer Duty #5: vulnerability outside mass market business

It’s day 5 of our Twelve Days of Consumer Duty exploring key questions midway through firms’ implementation journeys.  

Today’s question

“How does vulnerability arise outside mass market retail business?”

The answer

It’s at least technically possible for someone other than a natural person to be a “vulnerable customer”.  For example, a corporation.  It’s true that the definition of “vulnerable customer” in the FCA guidance refers to “personal circumstances”, which doesn’t neatly apply to a corporation (though it might be more apposite for sole traders).  However, this is just guidance; the FCA Handbook doesn’t define the term, and indeed some firms already qualify for more careful treatment under the Consumer Duty by virtue of falling within the definition of “retail” in certain sourcebooks (e.g. micro-enterprises in BCOBS).

You may need to consider the relevance of any vulnerability of a corporation’s lead individual(s) to the vulnerability of the corporation.

If a corporation qualifies as retail and you have information suggesting that they are vulnerable, you will need to comply with the Consumer Duty as it pertains to vulnerability – and in this context the cross-cutting rules are especially important i.e. to avoid foreseeable harm, act in good faith and act to ensure that the customer can pursue its financial objectives.

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