Vulnerable Customer Policy
The Autobahn Finance management team takes its responsibility to treat all customers fairly very seriously.
The firm’s various policies and frameworks, not least of which is the Treating Customers Fairly (TCF) Framework, all seek to support this principle and promote excellent practice throughout the customer journey and within the management ethos, aiming to make sure that TCF is a prime factor in every facet of our business’ activities.
We have recognised that certain groups of customers could be defined as vulnerable, and thus potentially susceptible to making poor borrowing decisions when presented with anything other than clear and specifically targeted information.
All customer facing staff have completed training to identify vulnerabilities and our script has been updated to positively ask the customer whether they have any health issues, if any life events such as divorce or bereavement may affect their decision making ability. We also discuss low financial resilience and capability and how we can adapt our processes to accommodate these issues.
Our aim as a business is to ensure that no customer, vulnerable or otherwise, is disadvantaged as a result of our practices and that all customer communications are clear and unambiguous. We also send out a follow up communication to our customer’s to recheck that nothing else comes to mind following the application for finance and once the transaction is complete we send out a survey to ask for feedback about our processes and ask for suggestions about how we could improve.
The FCA define a vulnerable customer as –
“A vulnerable consumer is someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.”
We would further this by adding –
Vulnerable customers could be those experiencing financial hardship, long-term sickness or who have a core disability. It also includes those customers who are unsophisticated or inexperienced in lending and not sure of the process involved. It could also include the elderly who may have recently lost a spouse who always dealt with their borrowing needs and who again may not be familiar with the processes involved, or customers who may have little or poor English
Vulnerability can come in a range of guises, and can be temporary, sporadic or permanent in nature. We aim to support these customers, ensuring they have equal access to our services.
Our target market, through its various product offerings may include young and elderly, where sophistication may be lacking in terms of basic understanding of our products, that would normally be taken for granted to a degree within a more mature customer base. We also deal with a significant amount of customers where English is not their first language
This policy loosely defines the four main vulnerability categories that the firm needs to take measures to support within its practices, as follows:
- Poor Health – Severe Long Term Illness, Poor Hearing, Mental Ill Health
- Life Events – such as Divorce, Bereavement, Redundancy or Domestic Abuse
- Low Financial Resilience – customers where affordability may be an issue.
- Low Capability – customers where understanding of the products they are purchasing may be unusually low, or they may struggle with technology
Why is it important to identify Vulnerable Customers?
- Because it’s the right thing to do to demonstrate commitment to customers.
- It will give a better understanding of your customer’s individual circumstances (TCF).
- Autobahn Finance have a legal and regulatory responsibility regarding Vulnerable customers, but more importantly we have an ethical responsibility to them.
- The firm takes advice and guidance from the following sources:
- Legislation – The Mental Capacity Act 2005, Adults with incapacity Scotland 2004 Act, Data Protection Act 1998. The Equality Act 2010
- Regulation – FCA Principles for Business including CONC.
- Voluntary Codes of Guidance – Money Advice Liaison Group, Ministry of Justice Mental Capacity Act Code of Practice.
A firm must establish and implement clear and effective policies and procedures to identify particularly vulnerable customers and to deal with such customers appropriately.
Regulatory & Ethical Obligations
- The principles of treating our customers fairly are embedded within the Culture of our firm.
As a Regulated firm Autobahn Finance must establish and implement clear, effective, appropriate policies and procedures for the fair treatment of customers who we know or suspect are vulnerable.
- Physical Disability such as deafness
- Mental Ill Health
- Severe Long Term Illness
Following the customer disclosing they are deaf or hard of hearing, we would qualify whether the customer requires alternative formats whilst taking the proposal
- Alternative formats – whilst many customers who need reasonable adjustment may not be vulnerable, we recognise that for some customers a disability such as being deaf means we need to communicate with them in a different way.
- Text phone and Minicom – these services are available to customers to help them communicate with Autobahn Finance. These services act as a conduit to transmit a message between Autobahn Finance and the customer in a way that is accessible to the customer.
If the customer discloses mental ill health the staff would escalate to a team leader who would follow the Texas Drill and Compass (see below) and ensure they ask for explicit consent to record the information so as to not breach GDPR regulations.
Severe Long Term illness – Cancer, MND etc
Frontline staff will enquire as to how long the customer has had the illness and will ask the customer “Does this life event affect your ability to make an informed decision today or in the future?”, frontline staff will again ask for explicit consent to record the information so as to not breach GDPR Regulations. Any affordability issues would be shared with the lender to be reviewed by their underwriting team.
- Bereavement, Divorce, Redundancy, Caring Responsibilities
- Domestic Abuse - Coercion
Following the customer disclosing they are temporarily vulnerable due to a life event which has just happened such as a bereavement, divorce or redundancy, then our front line advisors will again ask the customer “Does this life event affect your ability to make an informed decision today or in the future?” If the answer is positive then the application will be slowed down and time given to the customer to consider the application before going any further. Frontline staff will also signpost to the charities and organisations noted in this policy and send out the supporting customers document.
If Frontline staff becomes aware that the customer may be subject to domestic abuse or coercive and controlling behaviour, they would ask the customer if there was a more convenient time to call the customer (out of harms way) and they would also give them more time to consider the proposal and ask for further information such as bank statements and payslips. Signposting would be carried out through the sending of the Supporting Customers document.
Low Financial Resilience
Within the bounds of our capability, we need to be sensitive to the needs of customers who may be financially vulnerable. Strategies to cater for this need and tactics to support those will include:
- We would encourage our customers to contact us (or their finance provider directly) if they are experiencing financial hardship.
- We should also point out the consequences of non-payment, for example, the impact on an individual’s credit file, possible legal issues if cover is compulsory, without the constant use of jargon. It could even lead to asset repossession.
- Avoiding encouraging people to make purchases that are beyond their financial means:
- Offering credit terms which are clearly defined, suitable for the customer and provided by fully regulated providers.
- Clearly defining consequences of non-payment of premium when paying by credit agreement:
- Clear warning wordings on any customer facing documents.
- Warnings included within scripts for telephone business.
- Operating an extensive and explicit post sale communication strategy; again avoiding the use of industry jargon:
- Credit agreements are managed by separate, regulated providers with extensive premium finance experience and they provide a clear and comprehensive post sale welcome pack to every credit customer.
- Explaining that the credit agreement is for a loan, hire purchase, personal contract purchase and is a contract with the lender and is not with ourselves as the broker.
- Explaining that if the policy is cancelled mid-term, what this would mean to the customer.
- We make sure that all communications regarding any debt to us are clear and not misleading.
- The consequences of non-payment are clearly communicated to the customer which could potentially lead CCJ’s or asset repossession.
By adopting such approaches, we believe that we will also be able to assist the client with any affordability issues as far as we are able, by warning of consequences and pointing out any continuing obligations.
We are conscious that, in particular, first time borrowers will not have the same understanding of the products and what they are designed to achieve as opposed to long term and experienced purchasers.
It may also be the case that certain older customers, or customers where English is not their first language for example may suffer similar vulnerability.
Strategies to cater for such customers’ demands and needs and tactics to support them include:
- Clear information on our website and in all our customer facing documents.
- The pre contract document explains the requirements from our customers clearly.
- For those customers with no internet/email access, we will speak to them and send the RDD and finance documents manually through the post or with their permission to the dealer.
- Our documentation is designed to be clear to ensure people receiving it will understand the commitments they may need to fulfil.
- In order to address the needs of vulnerable consumers correctly it is important to be able to identify them.
- Communication methods are designed to be suitable for our customer base, to ensure that customers receive necessary information in an accessible and appropriate format.
- It will be prudent early on to establish how the customer requires you to communicate with them once their loan is completed.
- Other considerations may include asking the customer if they would like us to liaise with an authorised third party i.e. a family member who does speak English. We would do this by speaking to both parties on loud speaker and assessing whether the customer understands and the family member is only assisting not translating for them. If the frontline advisor feels that the customer does not fully understand then the application would not be taken any further and they would signpost them to their bank for further help.
There may be an instance when customer’s behaviour leads you to suspect that they may be vulnerable.
What would lead you to suspect that a customer may be vulnerable to their behaviour?
- A customer may come across confused.
- A customer may repeat themselves.
- A customer may slur their words.
- Sounding emotional.
- “Yes” “Yes” “Yes” – could indicate a lack of understanding
- A customer may mention medication.
What would you do in these circumstances?
- Ask open questions
- Slow down
- Repeat back
- Ask customer to summarise to gain understanding
GDPR & Explicit Consent
- Under the General Data Protection Regulation (GDPR) May 2018, information about a customer’s mental or physical health condition is classed as sensitive personal data
- Staff can put a flag on the account if they suspect Vulnerability but will need explicit consent to record sensitive personal data
- You have a legal duty to clearly explain to the customer how their information will be used, stored and shared
- Information about a person’s physical mental health is classed as such ‘sensitive personal data’ (sitting alongside data, for example, on race or ethnicity, religious beliefs, sexuality and criminal history)
Collecting relevant information is good as it:
- Allows us to make informed decisions on how to support customers
- Enable subsequent dealings to process as effectively as possible because the information is readily available
- Allows us to be more responsive to customer’s circumstances.
- Autobahn finance have now adopted a vulnerability classification matrix to record the different types of vulnerability for training and monitoring purposes.
The TEXAS drill provides guidance on the core questions that staff should ask when dealing with customers disclosing mental or physical conditions.
“Thank you for letting us know. I’m sorry to hear things have not been easy for you. It is important to us that you manage your account in the most appropriate way”
EXPLAIN HOW THEIR INFORMATION WILL BE USED (legal requirement)
“Let me explain how we’ll use that information so you know.”
EXPLICIT CONSENT (legal requirement) is it okay if I note this information
“Is it okay if I note this information as it will help us and or client deal with your account in the best possible way?”
ASK THREE QUESTIONS (to help you understand their situation)
- “Do your circumstances make it difficult for you to repay your debt?”
- “Does your situation affect your ability to deal or communicate with us?”
- “Does `anyone need to help you manage your finances such as carer or relative”?
SIGNPOST TO OUR VULNERABILITY CHAMPION
All staff have been trained regarding identifying vulnerable customers and noting the classification on our CRM system. Any follow ups or queries are signposted to our Vulnerability Champion. A selection of VC calls will be monitored on an ongoing basis,
Following the above guidance will ensure that we are compliant with the General Data Protection Regime (GDPR) May 2018, which requires organisations to collect, use, retain or dispose of personal data fairly and legally. Under the Act, information about mental health is considered sensitive personal data and is subject to more stringent restrictions.
Frontline staff will need to understand TEXAS when Vulnerability is discussed. Once identified as vulnerable, you need to understand how to deal with vulnerable customers.
Compass can help guide staff in their conversations with customers. Each compass point is a key issue for decision making that staff can listen out for, or ask about, to get a better IDEA about the customer’s situation:
Impact – staff should ask what the mental health problem either stops the customer doing in relation to their financial situation, or what it makes harder for them to do. This will help provide insight into both the severity of the condition, and its consequences.
Duration – staff should discuss how long the customer has been living with the reported mental health problem, as the duration of different conditions will vary. This can inform decisions about the amount of time someone needs to be given to retake control of their situation.
Episodes – some people will experience more than one episode of poor mental health in their lives. Creditors will need to take such fluctuating conditions into account in their decision-making. Assistance – creditors should consider whether the customer has been able to get any care, help, support or treatment for their condition. This may help in relation to collecting medical evidence.
Assistance – creditors should consider whether the customer has been able to get any care, help, support or treatment for their condition. This may help in relation to collecting medical evidence.
Working with third parties
In the event that the customer has authorised you to deal with a third party on their behalf we will do so in accordance with their instructions.
In the event that an unauthorised third party contacts you and discloses information that may imply the customer is vulnerable (this could include a family member, friend or organisations such CAB) the CARERS acronym should be followed.
As a business, we talk to our customers regarding their purchasing decisions, and we aim to provide them with all of the information that they need to be able to make informed and responsible borrowing decisions.
Where possible, this will be communicated by using plain, simple language to enable the customer to understand the journey and the end product or service.
We can offer a variety of methods for providing the necessary information to all customers to support their decision making process, as described above.
We provide sensitive support services designed to meet all customers' needs, catering for all target customer groups both proactively via the provision of clear and well-designed communications, and responsively through telephone interaction
Consistent monitoring of complaints received and root-cause analysis is also a good tool to identify trends.
Our services are clearly defined in such a way as to be accessible to vulnerable customers as defined above, but also to enable such customers to make informed purchasing decisions, which may include deciding not to purchase where they may feel that a more personal or bespoke service with advice provided may be more appropriate to their individual needs.
We also adopt a flexible approach to each customer’s needs, rather than ‘pigeon hole’ them into an off-the-shelf product.
We are also mindful of the fact that many such customers will need the help of a third party such as a family member or other advisor and as such, or where a family member has a Power of Attorney or similar authority whilst being conscious of the need to be vigilant over data protection and confidentiality, we will endeavour to adopt a flexible approach when dealing with policy holders’ representatives.
Supporting Customers - Signposting
Frontline staff will refer our customers to the Supporting Customers Document which is sent out with the RDD (Regulatory Disclosure Document) with all customer applications and links to this Vulnerable Customer Policy and the Signposting to charities and organisations who can offer advice, help and support if you’re in difficult circumstances shown below.
Step Change Debt Charity
Money Advice Trust
National Centre for Domestic Violence
Mental Well- Being
Long Term Ill Health
Asylum Seekers and Refugees