Regulatory change — FCA research into vulnerable customers and consumer credit

On 1 April 2014, the Financial Conduct Authority (FCA) published its research into the ‘Consumer Credit and Consumers in Vulnerable Circumstances’ customer segmentation.

This coincided with the publication of the FCA’s Business Plan and Risk Review for 2014–15, both of which centre on the fair treatment of consumers and the need for cultural change to ensure that customers are truly at the heart of financial service businesses.

The research, while recognising the importance of consumer credit in the UK economy, suggests a concern about consumers getting into financial difficulties by overstretching themselves. It identifies that the key contributors of unmanageable debt are (a) a change in circumstances and (b) high levels of accumulated debt. These, when linked with customers on low incomes, reduce the consumer’s ability to deal with high levels of debt…

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