Short-term credit is, by its nature, often used by people going through a difficult financial period — and the regulator that oversees lenders has specific, binding expectations about how firms must treat customers who are in a vulnerable situation, whether that vulnerability is obvious or not.
Why the FCA focused specifically on this
The FCA published finalised guidance for firms on the fair treatment of vulnerable customers, aimed at driving genuine improvement in how firms treat customers who may be at greater risk of harm. The guidance was prompted partly by the FCA’s own research, which found that a very large proportion of UK adults — tens of millions — show characteristics of vulnerability at any given time, whether through poor health, a negative life event such as bereavement or job loss, low financial resilience, or low capability in dealing with financial matters. This isn’t a small, unusual minority of customers; it’s a substantial share of the people any consumer lender deals with regularly.
What counts as a “vulnerable” customer
The FCA’s guidance is deliberately broad rather than tied to a fixed checklist, because vulnerability can be temporary, fluctuating, or permanent, and can affect anyone. It commonly relates to one or more of four broad drivers: health (including physical or mental health conditions), life events (such as bereavement, relationship breakdown, job loss or domestic abuse), resilience (low ability to withstand financial or emotional shocks), and capability (low knowledge of financial matters, low literacy or numeracy, or low confidence managing money or using digital services). Someone can be in a temporarily vulnerable situation — for example, following a bereavement — without it being a permanent feature of who they are, and firms are expected to recognise that vulnerability can change over time.
What firms are actually expected to do
The guidance sets out concrete expectations rather than vague aspiration. Firms should understand the needs of their target market and customer base, including the likely presence of vulnerable customers within it. Staff need to have the skills and capability to recognise and respond appropriately to signs of vulnerability, not just process an application mechanically. Product design, customer service and communications should all take vulnerability into account — for example, offering alternative ways to communicate for someone who struggles with standard digital channels, or building in extra care around affordability assessments where vulnerability is disclosed or apparent. Firms are also expected to actively monitor and assess whether they are genuinely meeting the needs of vulnerable customers, rather than assuming good intentions are enough.
How this sits alongside the Consumer Duty
Following a review of firms’ practices, the FCA concluded its vulnerable customer guidance remains appropriate and continues to work alongside the Consumer Duty, which separately requires firms to act in good faith, avoid foreseeable harm, and support customers in pursuing their financial objectives. In effect, the vulnerable customer guidance gives specific, detailed expectations for a particularly high-risk group of customers, sitting underneath the broader outcomes-focused standard the Consumer Duty sets for everyone.
What this means if you’re struggling
- You are not obliged to disclose a health condition, bereavement or other personal circumstance to get fair treatment, but doing so — where you’re comfortable — can help a firm apply the extra care it’s expected to give.
- If you feel a lender has pressured you, ignored clear signs of difficulty, or made it hard to get help while you were going through a genuinely difficult period, this is directly relevant to a complaint, since it touches on the FCA’s specific vulnerable customer expectations.
- Ask directly whether a lender has options such as payment breaks, referral to free debt advice, or adjusted repayment arrangements — firms are expected to have genuine processes for this, not just a generic complaints line.
FAQs
Do I have to be formally diagnosed with something to count as “vulnerable”?
No. The FCA’s approach is based on characteristics and circumstances — including temporary situations like bereavement or job loss — rather than requiring a formal diagnosis or label before fair treatment obligations apply.
What can I do if I don’t think a lender treated me fairly given my circumstances?
Raise it directly with the lender’s complaints process first, referencing the specific circumstances involved. If you’re not satisfied with the outcome, you can escalate the complaint to the Financial Ombudsman Service, which can consider whether the firm met its regulatory obligations, including around vulnerable customer treatment.
Does this guidance give me a legal right to a specific outcome, like a fee waiver?
Not automatically — it sets expectations for how firms must approach and respond to vulnerability, rather than guaranteeing a specific financial outcome in every case. What it does do is give you a clear, recognised standard to point to if you feel a firm has fallen short.