It also called for greater consistency across the relevant sectors so that protection for vulnerable people becomes the norm.
The guidance is split into sections including understanding the needs of vulnerable people, product design, staff skills and monitoring.
Strategy director Woolard added: “Firms need to take particular care to ensure that vulnerable consumers are treated fairly as they may be more likely to experience harm. The guidance should drive improvements across the industry, improving outcomes for millions of vulnerable consumers.”
In the report, a vulnerable customer was defined as someone who were made “especially susceptible to detriment” by personal circumstances including health conditions, low ability to withstand emotional shocks, little financial knowledge and serious life events like bereavement.
It added: “Some consumers will be actually vulnerable because of their personal circumstances. Actual vulnerability can be permanent but is often transient because consumers’ circumstances constantly change. This can cause consumers, who had not previously been vulnerable, to become so at some stage of their life,” and asked firms to watch out for them.
StepChange head of policy Peter Tutton said: “Our research shows the extra problems vulnerable people can face and the difficulty of resolving problems. This FCA guidance is vital step to market that works well for all people. We look forward to the focus it should produce on ensuring products and services can accounts of the needs of vulnerable consumers by design.. So we welcome the FCA’s new guidance, and urge the regulator to implement it as soon as practical and to monitor it closely.”
In the past our social investment arm, Big Issue Invest has backed not-for-profit lenders like Moneyline, Street UK and Fair For You to help stop people falling into the hands of unscrupulous lenders.
Big Issue Invest was also among nine investors who made a £5m investment in Five Lamps, a responsible lender based in the North East of England – the same region where Wonga was founded.
The investment – the largest-ever single investment in a UK community lender – means it could provide 100,000 affordable loans over six years to support the most vulnerable break out of the cycle of high-cost credit debt. It is the largest-ever single investment in a UK community lender.
The FCA would like feedback from firms and lenders on the guidance before October 4 this year.