The ethics of dealing with vulnerable customers

Monday, 18 May 2020

Clare Payne photo
Clare Payne
EY Fellow for Trust and Ethics, Honorary Fellow, The University of Melbourne

    As businesses seek to navigate their way through the challenges that COVID-19 presents, something they are likely to encounter more of is vulnerable customers. People whose lives were ‘OK’ just months ago, might find themselves suddenly vulnerable. What are the implications for the individual and those in business who deal with them?

    As income is constrained and domestic pressures mount, the number of vulnerable people in Australian society has increased. The flow on effects for business are obvious as customers can’t pay bills or meet their contractual obligations, but there are also other much wider considerations.

    A principles-led ethical framework and set of questions can provide guidance, helping to bring businesses closer to meeting the ethical expectations of society and ensuring the social licence to operate is maintained.

    On the agenda

    The Financial Conduct Authority, the conduct regulator for 58,000 financial services firms and financial markets in the UK defines a vulnerable consumer as someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care. They released a comprehensive guidance on the fair treatment of vulnerable customers just last year.

    The issue of how best to deal with vulnerable customers has long been on the agenda of organisations such as the Australian Competition and Consumer Commission (ACCC), who in 2011 released a guidance for business titled, ‘Don’t take advantage of disadvantage.’

    Last year, the Australian Banking Association launched a public consultation on new industry guidelines for supporting vulnerable customers, referencing “Raising the bar”iii. This year, they launched a new Banking Code of Practice with a chapter titled, ‘Taking extra care with customers who are experiencing vulnerability.’ Other industry bodies, professional associations and individual firms have also sought to implement standards, processes and systems to ensure the vulnerable are protected and reassure the community they will do the right thing by those who are, or are likely, to become vulnerable.

    Ensuring the law doesn’t become an obstacle to care

    However, doing the right thing is not always easy, particularly when businesses must comply with various pieces of legislation – such as privacy, data protection, fair trading and anti-discrimination laws. They must navigate through the particulars of each piece of legislation to ensure the intent is honoured and the vulnerable are still treated with care.

    A greater responsibility

    Whilst legislation and guidelines are often clear on how to deal with those who ‘self-declare’ as vulnerable, it can become grey and complex for those whose vulnerable status becomes known by other means. And the reality is that many who experience vulnerability will not identify as such. Instead, their situation becomes apparent to others through observation when dealing directly with them or through data that is generated by an interaction.

    In all cases however, a general duty of care, that includes a moral obligation to ensure the safety and wellbeing of others, should apply regardless of how the status of an individual as vulnerable has been determined.

    A role for responsible business

    Our markets operate according to a generally accepted principle that as customers we should take responsibility for our choices and decisions. However, a responsible business will acknowledge that there can be factors that may limit the ability of people experiencing vulnerability to take on this responsibility.

    When legislation such as privacy and data protection restrict the direct action that can be taken in relation to the vulnerable, such as documenting and reporting particulars of the situation, a principles-led ethical framework and set of questions can provide guidance, helping to bring businesses closer to meeting the ethical expectations of society and ensuring the social licence to operate is maintained.

    Principles as guidance

    A principle-led framework can guide decisions and actions to ensure people experiencing vulnerability are properly supported. For example:

    • Care – Are we acting with care?
      Act with care by adapting to an individual’s needs. Provide a level of care that is appropriate to the capabilities of the individual and empower staff to exercise their judgement.
    • Fair – Are we being fair?
      Ensure the provision of fair service to those who are actually or potentially vulnerable. Businesses shouldn’t unfairly benefit from the person experiencing vulnerability.
    • Harm – Are we reducing harm?
      Take appropriate actions to reduce and eliminate harm. Remain aware that harm to an individual can extend to those in their care and network.

    Doing better, for the sake of others

    It is important for businesses to support those who deal with people experiencing vulnerability so that they can operate with personal integrity and maintain their own standards as a professional and a responsible citizen. Open communication and good listening skills will be important to ensure all who are involved are properly understood, supported and the best outcome reached.

    Joanne Richmond, a customer vulnerability specialist, states, “Never has it been more clear that we can all become vulnerable. Now more than ever, businesses need to be flexible and empathetic to the needs of individuals, and in doing so earn the longer-term trust of their stakeholders for ‘doing the right thing.”

    Some businesses will lead by going above and beyond legislation and guidelines. They may incur short term financial losses, but the trust that they build with their customers and other stakeholders will support more sustainable long-term outcomes. In turn, they will set a new best practice and their actions will be remembered, and not just by the vulnerable. As Gandhi reminded us, "The true measure of any society can be found in how it treats its most vulnerable members."

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