Vulnerable Consumer Policy
The purpose of this policy is to ensure that the operations of Peaceful Hearts does not have a negative impact upon vulnerable consumers.
For the purposes of this policy vulnerable consumers are customers and prospective customers whose ability or circumstances require us to take extra precautions in the way that we sell and provide our services in order to ensure that they are not disadvantaged in any way.
Identifying a vulnerable consumer
When engaging with customers we are aware that the individual and their families have recently experienced a significant loss and that this is a stressful and distressing time. On this basis without upsetting the family further we tend to be very considerate of the circumstance and ensure that we underpin the service we provide with this policy. When dealing with a client by telephone it is not possible to see many of the characteristics, such as body language and facial expressions, which may identify whether the prospective customer requires additional information and guidance to enable them to make an informed decision. For this reason we make every effort to listen carefully to all customers and to identify people who may be classed as a vulnerable consumer with additional vulnerabilities to their current bereavement set of circumstances.
Typical telephone characteristics include:
- An inability to hear or understand what is being said
- Repeated questions of a similar nature
- Comments or answers which are inconsistent with the telephone discussion or which indicate they have not understood the information which has been provided.
- Verbal confirmation that they don’t understand or that they require the assistance of somebody else in making a decision.
This is why when assisting our clients with the service requirements we engage in a full face to face consultation at the family home or a location where the client is comfortable. It is usual for face to face consultations to manifest the same characteristics that are experienced by telephone but that are likely to be evident by body language and facial expressions when identifying vulnerability.
Engaging with a vulnerable consumer
We always carry out an administrative risk assessment and make a record of the same and ensure we adhere to this policy.
When speaking to the vulnerable consumer we:
- Provide additional opportunities for the customer to ask questions about the information we have provided.
- Continuously seek confirmation that they have understood the information that has been provided.
- Ask if there is anybody with them who can assist them, and offer them the opportunity to have a family member or friend present during the conversation
- Offer them the opportunity to complete the transaction after a period of further consideration.
Mental capacity is a person's ability to make a decision. Whether or not 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, the mind or brain.
Mental capacity is always defined in relation to a specific decision at a specific time.
Consequently, when considering our service we take account of the customer's circumstances at the time at which the request is made.
We take appropriate steps to identify whether or not 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 (or be fluctuating over time). Consequently, the fact that a person may not have had the mental capacity to make a particular type of 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 the circumstances of our industry 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 at this distressing time but at a later date their decision making may be more straightforward.
Among the most common potential causes of mental capacity limitations are the following (this is a non-exhaustive list):
shock and post traumatic stress
mental health condition
• learning disability
• developmental disorder
• neuro-disability/brain injury
• alcohol or drug (including prescribed drugs) induced intoxication.
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 on a presumption that he/she doesn't have the mental capacity to make a particular decision based solely on the knowledge that he/she 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 us 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 virtue of 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 we will apply this vulnerable consumers policy in both circumstances.
While acknowledging that there are limits that we 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 us to consider what reasonable steps might be taken in order to amend our ordinary processes to ensure that the customer is treated fairly and a positive outcome results for the customer.