“The test of our progress is not whether we add more to the abundance of those who have much; It is whether we provide enough for those who have too little.” - Franklin D. Roosevelt, second inaugural address, 20 January 1937
The America of the 1930s was a vastly different place than it is today. At its height, unemployment hit 25 percent. 5,000 banks failed. Drought and erosion in the agricultural sector created severe conditions dubbed the Dust Bowl, which displaced hundreds of thousands of families from farms. Homeless Americans drifted from rural settings to cities, where they lived in shanty towns, which were little more than cardboard and paper shacks.
Today, the world faces challenges not seen since the days of the Great Depression. War, famine, recession, climate change events, and a volatile political landscape have created conditions in our own communities that threaten to upend millions of people’s lives.
The Facts Are Hard to Ignore
YouGov, an international research data and analytics group, published its findings in its 2022 cost of living tracker report. Inside, many troubling statics came to the fore:
- One in four Britons says that they are struggling or failing to make ends meet.
- Three quarters expect the economy to worsen in 2022-2023.
- Many Britons - 72 percent - expect the economy to be in recession or depression within a year.
The rising cost of living has forced eight in ten Britons to cut their usual spending. The dramatic rise in energy prices is behind this hardship. It’s likely to get worse during the winter.
When the economy gets bad, it hits low-income and vulnerable people the most. So, it should be no surprise that YouGov reports that one in four Britons struggles to afford - or can’t afford - essential items. For many, it’s heat or eat.
Defining the Term ‘Vulnerable’
In corporate compliance, the word ‘vulnerable’ has its unique meaning. It is essential to be aware of its legal implications.
The Financial Conduct Authority (FCA) defines a vulnerable customer as:
“Someone who, due to their personal circumstances, is especially susceptible to harm - particularly when a firm is not acting with appropriate levels of care.”
“All customers are at risk of becoming vulnerable, but this risk is increased by having characteristics of vulnerability. These could be poor health, such as cognitive impairment, life events such as new caring responsibilities, low resilience to cope with financial or emotional shocks and low capability, such as poor literacy or numeracy skills.”
The guidance went on to say that more than 50 percent of UK adults meet the definition of vulnerability.
Be Aware of the Vulnerable Customer, Or Face Penalties
For digital businesses, it is not only about supporting non-profit charities. There is also a legal obligation that could have significant financial penalties for not being compliant with FCA guidelines.
In 2020, the FCA fined Barclays Bank and several of its subsidiaries “26 million UK pounds for failures in their treatment of consumer credit customers who fell in arrears or experienced financial difficulties.” The bank faced penalties for “poor treatment of its customers (which) risked making these difficulties worse,” said a director of FCA.