Consumer Duty: UK FCA finds no room for complacency in firms’ treatment of customers in vulnerable circumstances involving bereavement and powers of attorney

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We have significant experience in supporting firms to embed vulnerable customer processes. The combination of our legal and consulting teams provides you with a full range of services, and clear guidance on how the solutions can be applied within the business. If you would like to discuss how we can help you, please reach out to any of the people listed in this article or your usual Hogan Lovells contact. 

What’s the context for this latest FCA review? 

On 12 April 2025, the FCA published the findings of its review of how retail banks and building societies approach the treatment of customers in vulnerable circumstances that involve bereavement and powers of attorney (PoAs). 

This is one of the sector-specific priorities for its Consumer Duty work that the FCA confirmed last December. 

It is also part of the FCA’s broader review of how firms support customers in vulnerable circumstances (see our related Our Thinking article here) and builds on its review of life insurers’ bereavement claim processes. The FCA states that some of the good practices identified in that review could be applied by banks and building societies, such as use of electronic ‘verification of death’ to avoid the need for claimants to send in Death Certificates. 

What were the FCA’s findings? 

The FCA found that, generally, the firms it had reviewed had taken steps to refine their approach to the treatment of customers in vulnerable circumstances since the introduction of the Consumer Duty; however, more should be done to identify and ensure delivery of good customer outcomes. 

The review highlighted examples of good practice and areas for improvement, including: 

• Policies and procedures –  The FCA highlighted that, in addition to being accessible and user friendly, these should: 
  • enable employees to be able to deal with emergency events (e.g. when the customer’s capacity suddenly changes or funds are urgently needed) and escalate complex cases for consideration; and 
  • strike the right balance between protecting customers from fraud or financial abuse on the one hand, and customers’ needs to continue undertaking basic banking activities (such as payment of essential bills in a timely manner) on the other. 
• Identifying and responding to customer needs –  The FCA highlighted the benefit of: 
  • harnessing data and technology appropriately to ensure firms provide customers with the right support; and 
  • the importance of staff training and feedback to improve the way staff engage with vulnerable customers. 
• Customer journeys and communication channels – These should be designed with customers in vulnerable circumstances in mind, particularly for critical services such as bereavement and PoA. 

However, the review placed particular emphasis on: 

• Reviewing and improving potentially fragmented customer relationship management (CRM) systems across business lines/legal entities to ensure customers don’t have to repeat information or have their cases delayed or dropped altogether because they have been ‘lost’ in the firm’s systems, and staff across a firm can better assess how to adapt their support and limit the risk of compounding distress for bereaved customers; and 
• Improving outcomes testing and monitoring. 

Specifically, the FCA stated that ‘[n]o firm can afford to be complacent’ and highlighted that: 

• firms need to be clear on what good and poor outcomes look like for their customers (recognising that a good outcome may be multi-faceted and not simply based on speed of delivery); 
• MI used to monitor and test outcomes should rely on broad and detailed data that gives a clear picture of customer outcomes; and 
• MI reports to senior committees should be clearly drafted, with detailed commentary. 

Whilst this review was focused on vulnerable customers (and in particular PoA and bereavement cases), it serves as a reminder that the FCA considers that identifying what good customer outcomes look like, having the ability to monitor whether these are being achieved, and having strong governance to ensure senior management oversight and engagement, are fundamental to meeting Consumer Duty requirements, and are potentially relevant to every aspect of the customer lifecycle. 

Authored by Charles Elliott, Dominic Hill and Virginia Montgomery.