Merlyn Holkar, Senior Research Officer
What the FCA’s duty of care means for people with mental health problems
02 August 2021
Banks, insurance and other financial services are essentials of modern life, but too often these services aren’t designed with our best interests at heart. The cost of borrowing can be eye-watering and it sometimes feels like you need a PhD to understand terms and conditions. Members of our Research Community tell us that dealing with financial services can be hard work and often a stressful experience, especially when you’re struggling with your mental health. One in four of us experience a mental health problem each year, but too many providers still don’t understand mental health or design services that work for people when they are unwell.
“I’ve had panic attacks and less often suicidal ideation due to the stress of trying to deal with these companies. I’ve felt very low when I ask for help and they don’t seem to want to help me.” – Expert by experience
The Financial Conduct Authority (FCA), the regulator that sets rules for banks and other financial service providers, is proposing a new duty that could help to address some of these problems. Under the FCA’s plans, financial service providers would have more responsibility than ever for making sure that people experience good outcomes when using their products and services. This would affect everything from the way companies design financial products to how much they cost.
What has the FCA proposed?
The FCA has set out plans for a new duty and is currently consulting on the finer details. The regulator wants banks to put themselves in their customers’ shoes and ask – would I be happy to be treated in the way my company treats its customers? We think the FCA’s plans focus on a lot of the right areas – including poor customer services and unfair expensive prices – and we’re glad to see a big focus on making sure that financial service providers treat their most vulnerable customers well.
The plans look good on paper but the big question is, what difference will they actually make? For us, this depends on how well the FCA monitors banks’ behaviour and how quick it is to act if companies fall short of these new expectations. We also think the FCA needs to be as clear as possible about these new expectations. As with any rules, if the wording is too vague this can leave wiggle room and mean that the worst companies in the sector will shirk their responsibilities.
What does this mean for people with mental health problems?
The FCA wants banks to deliver a higher level of care and to avoid causing customers harm, like financial problems or stress. But we’re pleased to see the FCA also highlight banks’ responsibilities under the Equality Act, to make sure that they don’t discriminate and that outcomes for different groups of customers are fair. The Act makes it illegal for providers to deliver a worse level of service for disabled people, including many people with mental health problems.
This is something we’re currently exploring at Money and Mental Health. Under the Equality Act, banks and other financial services need to anticipate disabled people’s needs and offer extra support to help people use their services. This is why banks routinely send out braille or large print letters for people with visual impairments, and make sure their branches are accessible for people in wheelchairs.
We’ve been asking Research Community members what kind of support would be most useful for people with mental health problems, and how well providers currently meet their needs. As part of this project we plan to raise the Equality Act up the agenda and push essential service providers and regulators to make sure that people with mental health problems get the support they need.