Businesses need to realise the extent of customers’ vulnerability because their actions could increase it, the Financial Ombudsman Service (FOS) has said.
The FOS highlighted that businesses should acknowledge that consumers in vulnerable situations need their support.
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"Factors like age, physical or mental health, caring responsibilities, and life-changing events such as redundancy, relationship breakdown or bereavement could mean someone is put in a vulnerable position," the FOS wrote.
The FOS found that there were cases in which a consumer’s vulnerability escalated because the business involved had ‘rigidly’ applied rules and procedures or hadn’t realised the extent of their vulnerability.
"Where a vulnerable customer has proactively approached a business for help, this can be particularly upsetting," it wrote.
The FOS provided a case study where a consumer complained his car had been taken while he was in the hospital.
The customer, who took out a hire purchase agreement, fell behind on his payments and around the same time, was admitted to hospital with mental health issues.
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By GlobalDataThe customer spent the next year in and out of hospital and during that time. The customer’s mother informed the finance provider of this fact. Despite this, the finance provider repossessed and scrapped his car.
When he was feeling better, the customer complained to his finance provider, accepting he owed them money when he was admitted to the hospital. However the customer felt that given his personal circumstanced, they shouldn’t have scrapped the car.
"Having looked carefully at the records, it wasn’t clear to us why the finance provider had acted as they had. For a start, Mr E’s mother had told them that Mr E couldn’t take care of his own finances and that he was in hospital. But the finance provider had continued to send arrears notices to Mr E’s address even though they knew he wasn’t there and the reason why," FOS wrote.
The FOS told the finance provider to pay the customer £750 for the upset their errors caused, and £150 for the items which were in the car.
