In­quiry into ex­clu­sion from fi­nan­cial ser­vices

Western Mail - - PERSONAL FINANCE -

AN IN­QUIRY into con­sumers’ ac­cess to fi­nan­cial ser­vices has been launched by MPs amid con­cerns some vul­ner­a­ble cus­tomers are find­ing it in­creas­ingly dif­fi­cult.

The Trea­sury Com­mit­tee will scru­ti­nise whether cer­tain groups of peo­ple are ex­cluded from ob­tain­ing a ba­sic level of ser­vice from providers.

It will also ex­am­ine whether vul­ner­a­ble con­sumers pay more for fi­nan­cial ser­vices prod­ucts.

Nicky Mor­gan, who chairs the Trea­sury Com­mit­tee, said: “Vul­ner­a­bil­ity, as de­fined by the FCA [Fi­nan­cial Con­duct Au­thor­ity], is where some­one who, due to their per­sonal cir­cum­stances, is es­pe­cially sus­cep­ti­ble to detri­ment, par­tic­u­larly when a firm is not act­ing with ap­pro­pri­ate lev­els of care.

“With cus­tomers ex­pected to take more re­spon­si­bil­ity for their fi­nan­cial plan­ning and re­silience, bank branches clos­ing and the num­ber of free-to-use ATMs fall­ing, it’s be­com­ing in­creas­ingly dif­fi­cult for vul­ner­a­ble cus­tomers to ac­cess cer­tain fi­nan­cial ser­vices.

“The com­mit­tee will ex­am­ine the prac­ti­cal­ity of the FCA’s def­i­ni­tion, the ef­fec­tive­ness of at­tempts by fi­nan­cial ser­vices providers to pre­vent in­creased fi­nan­cial ex­clu­sion and whether a pre­mium is placed on prod­ucts such as travel in­sur­ance for vul­ner­a­ble con­sumers.

“As part of this in­quiry, we’ll be hold­ing ses­sions out­side of Par­lia­ment to hear from vul­ner­a­ble con­sumers who have in­ter­acted with fi­nan­cial ser­vices providers.”

Ques­tions the com­mit­tee will con­sider in­clude how fi­nan­cial ser­vices firms de­fine vul­ner­a­bil­ity.

It will look at the train­ing in place at fi­nan­cial ser­vices firms in re­la­tion to vul­ner­a­ble con­sumers and con­sider the mer­its of hav­ing a “duty of care” for fi­nan­cial ser­vices providers and ex­am­ine whether this would in­crease pro­tec­tion for vul­ner­a­ble cus­tomers.

The com­mit­tee will also ex­am­ine which cus­tomers are most dis­ad­van­taged when bank branches close and con­sider whether there is ev­i­dence to sug­gest that bank branch clo­sure leads to in­creased fi­nan­cial ex­clu­sion.

It will also eval­u­ate the im­pact of re­duc­ing the num­ber of free-to-use ATMs on vul­ner­a­ble con­sumers.

Other as­pects of fi­nan­cial ser­vices the in­quiry will look at in­clude how firms en­sure their in­for­ma­tion is ac­ces­si­ble to peo­ple with low lit­er­acy lev­els; the use of the Post Of­fice’s ser­vices in ar­eas where bank branches have closed; the sys­tems in place for power of at­tor­ney at fi­nan­cial ser­vices providers; and whether cer­tain bar­ri­ers lead to peo­ple not hav­ing a bank ac­count.

The in­quiry will also ex­am­ine whether vul­ner­a­ble con­sumers pay pro­hib­i­tively more for cer­tain fi­nan­cial ser­vices prod­ucts, in­clud­ing travel and home in­sur­ance.

The com­mit­tee also wants to know how tech­no­log­i­cal in­no­va­tion could help those who can­not eas­ily ac­cess phys­i­cal fi­nan­cial ser­vices branches.

Tom Selby, se­nior an­a­lyst at fi­nan­cial ser­vices com­pany AJ Bell, said: “Com­pa­nies across fi­nan­cial ser­vices need to build un­der­stand­ing of vul­ner­a­bil­ity into their re­spec­tive cul­tures, shar­ing best prac­tice and con­tin­u­ally re­view­ing and im­prov­ing the pro­cesses put in place to pro­tect cus­tomers.”

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