VULNERABLE CONSUMERS POLICY

Purpose


The purpose of this policy is to ensure that the operations of Sterling Green Ltd (the ‘Firm’) do not have any 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 over the phone it is often difficult to identify a Vulnerable Consumer because 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 it is critically important to listen carefully to all customers and to identify people who may be classed as a Vulnerable Consumer.

Typical telephone characteristics include

Advisers and staff who are assisting with signing up consumers will regularly engage with customers face to face. When doing this the same characteristics are likely to be evident but body language and facial expressions may also assist in identifying the vulnerability.

What to do if we are engaging with a vulnerable consumer

Just because somebody is vulnerable does not automatically mean that they are unsuitable for the products and services the Firm supplies. As soon we think we may be engaging with a Vulnerable Consumer we will immediately make a record of the same and ensure we adhere to this policy.

When speaking to the Vulnerable Consumer we will:

If for any reason we think the customer does not understand the service which is being offered to them we will not proceed with the transaction and advise them that we will write to them with further information about the product or services they are seeking.

What is mental capacity

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 or she is able to make a decision based on that information. The person will also need to be able to communicate their decision.

The mental capacity of a person may be limited in a way which prevents them from being able to make certain decisions because of an impairment of, or disturbance in the functioning of, his mind or brain.

Making decisions

Mental capacity is always defined in relation to a specific decision at a specific time. Consequently, when considering an application for a product, or change in product factors, the Firm will take account of the customer's circumstances at the time at which the application or request is made.

The Firm will take appropriate steps 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 (including 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 such circumstances 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 mental capacity limitations than more straightforward spending decisions.

Amongst the most common potential causes of mental capacity limitations are the following (this is a non-exhaustive list):

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's application for a product on a presumption that he doesn't have the mental capacity to make a particular decision based solely on the knowledge that he has a condition of the type listed above).

Financial Literacy

Mental capacity is not the same as financial literacy, although in practice, it may often be difficult for the firm 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 or not 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 the firm will apply its vulnerable customer’s policy in both circumstances.

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 the firm to consider what reasonable steps might be taken in order to amend its ordinary processes to ensure that the customer is treated fairly and a positive outcome results for the customer.

How to document this

Any decision or discussion based on the above should be noted/recorded on the client file or factfind. Any advice recommendations supported with a suitability report should also make reference to any considerations that have been taken in relation to the above