The Financial Conduct Authority has called on providers working across the sector to do more to support victims of financial abuse.
In a new blog on this issue the regulator says it has worked with charities, trade bodies and financial companies to understand how financial abuse manifests across the sectors it regulates and wants companies to do more to address this problem and support those affected.
It says that under its consumer protection objective the FCA has a role in securing an appropriate degree of protection for consumers of financial services. It adds that the new Consumer Duty rules set higher and clearer standards of consumer protection, requiring firms to put customers’ needs first.
In the blog the FCA’s head of consumer policy & outcomes Joanna Legg says: “Financial abuse can involve the manipulation of financial products and services. It can include loans taken out in the victim-survivor’s name, bank account takeover or the use of joint life insurance policies as a threat.
“We care about this issue and want victim survivors to experience better and more consistent treatment from their financial services providers. We have already seen great initiatives from some firms and professional bodies, and we want the sector to build on this.”
She adds: “We’ve looked at practice both here and in other countries, to help set priorities for focused action. This is a complex problem and there is no simple or quick fix, but we are seeing firms working to improve consumer outcomes, including:
- Innovative new approaches to help affected customers recover. We have seen examples of banks providing safe spaces for victim-survivors to ask for help, or in some cases going above and beyond by providing access to small ‘flee funds’ for victim-survivors
- Close work with specialist organisations to find ways to give victim-survivors back control of their accounts, including the ability to block abusive messages sent alongside payments
- New initiatives from industry bodies like UK Finance, the ABI and CII to improve awareness and understanding of issues across members, as well as highlighting best practice and monitoring progress.
“There is more that can be done to raise awareness and support consistent treatment of victim-survivors. This includes staff training to recognise the signs, referring victim-survivors to specialist support, and tools that can help consumers regain control. We talk about some of this best practice in our Guidance for Treatment of Customers in Vulnerable Circumstances.”