VL Autos Ltd Vulnerable Persons Policy

A vulnerable consumer is someone who due to their personal circumstances is especially susceptible to detriment particularly when a firm is not acting with appropriate levels of care.
(FCA definition)

The following list, which is non-exhaustive, sets out the types of factors that can mean that a customer should be categorised as vulnerable:
·  Low literacy, numeracy and financial capability skills
·  Physical disability
·  Severe or long-term illness
·  Mental health problems
·  Low income and/or debt
·  Caring responsibilities (including operating a power of attorney)
·  Being ‘older old’ for example over 80, although this is not absolute (may be associated with cognitive or dexterity impairment, sensory impairments such as hearing or sight, onset
of ill- health, not being comfortable with new technology)
·  Being young (associated with less experience)
·  Change in circumstances (e.g. job loss, bereavement, divorce)
·  Lack of English language skills
·  Non-standard requirements or credit history (e.g. armed forces personnel returning from abroad, ex-offenders; care-home leavers, recent immigrants)


A change in personal circumstances can cause a consumer to fall into a vulnerable situation – all the more so if the consumer already has one or more risk factors.
​People are particularly at risk in their interaction with financial services when they experience a change in circumstances that often leads to a financial shock.

This shock could be an unexpected large expense or a loss of income. A drop in income, or income volatility, can cause particular problems due to the ongoing commitment presented by many financial products. A reduction in ability to meet these financial commitments can cause both immediate and longer term problems.

In some instances, vulnerability and the associated stress can have an effect on people’s emotional state, cognitive ability, and ability to function. This may include feeling stressed and anxious, feeling unable to cope, too upset to talk, finding it difficult to concentrate, think clearly, assimilate information, and make decisions, and finding it difficult to deal with new
or unfamiliar tasks.

In these conditions, the impact of a problem or difficult interaction can be magnified, and vulnerability to unscrupulous practices is increased, creating a vicious circle. The individual’s
practical ability to seek redress may also be diminished.

We, or our family and friends, can all face times of stress and difficulty, when our abilities to cope may be compromised.
For example, we may experience a change in circumstances such as job loss or bereavement, or onset of a serious illness. In some cases, these difficulties may be short lived, but for many
they may be longer term or permanent.

Large numbers of people have longstanding physical or mental conditions that can make interacting with financial firms challenging. Financial services should be designed so that
they make the hard times easier – whereas, in reality, some of the barriers people face when interacting with financial services make an already stressful situation worse, and result in further harm for consumers.
Vulnerability has many forms. It can be caused by long-term characteristics such as a disability, or short-term circumstances such as job loss. It can be sudden, such as the diagnosis of serious illness, or gradual, like dementia. It can fluctuate and be episodic, as in the case of some mental illness.

Most of us will experience some sort of vulnerability at some point.

People are particularly at risk in their interaction with financial services when they experience a change in circumstances that leads to a financial shock. Income shock is
common and could come in the form of an unexpected large expense, or a loss of income due for example to job loss, reduction in hours, illness, bereavement, or taking on caring

Vulnerability is not just something to do with the characteristics of the consumer – it can be created or exacerbated by the policies and practices of firms. The way firms design their
systems and processes can make a huge difference to the ease with which consumers interact with them. Training staff to listen and understand, equipping them with flexible options and,
where appropriate, providing staff with the ability to refer particular problems to specialists within a firm that have the expertise and discretion to address difficult situations can also

Rather than designing products and processes for a mythical perfect customer the broad range of experiences of real consumers’ needs to be taken into account.

The impact on the consumer of a firm failing to deal appropriately and flexibly with vulnerability can be severe. From a financial point of view, people may be tipped into a spiral
of debt, feel the need to take out high-cost products (such as payday loans) or take on higher risks (e.g. travel without insurance). Some may withdraw from the market altogether,
preferring to maintain control by keeping cash at home. An unsatisfactory interaction with financial services can create additional stress, increase isolation, dependency or exposure to fraud (for example by sharing cards and PINs), and take up valuable time and energy for people who are already in a difficult situation.

Vulnerability can come in a range of guises, and can be temporary, sporadic or permanent in nature. It is a fluid state that needs a flexible, tailored response from us.

Many people in vulnerable situations would not diagnose themselves as ‘vulnerable’ The clear message is that we can all become vulnerable.

To enable us to identify potential vulnerability and prioritise our efforts, we use a risk factor approach.
·  Vulnerability involves the interplay between individual circumstances, situations and market factors.
·  A consumer’s state of mind can have a major impact on behaviour and decisions.
·  A change in circumstances, and multi-layered risk factors, are particular flags for potential vulnerability
·  The number of people involved is large and rising – prioritisation is vital to achieve a realistic approach.

Vulnerability is not just to do with the situation of the consumer. It can be caused or exacerbated by the actions or processes of our firm. The impact of vulnerability is strong and
many people are trying to cope with difficult situations and limited resources, energy and time. Stress can affect state of mind and the ability to manage effectively. In such conditions,
being confronted by a complex telephone menu system that gives no option of talking to a person; a ‘computer says no’ response; a call handler without time or inclination to listen, or
a system that fails to record what may be distressing circumstances and forces the customer to repeat themselves at every point of contact, can all create a spiral of stress and difficulty,
resulting in detriment.

In order to address the needs of vulnerable customers correctly, it is important to be able to identify them. In many cases, more than one risk factor is present which increases the
consumer's vulnerability.

Our sales team need to be alert to the signs that the person they are talking to may not have the capacity, at that moment in time, to make an informed decision about the implications of
the agreements that they are being asked to make. This is not a diagnosis of a condition; it is just an extension of staff's existing skill of listening, identifying needs, and adjusting their approach accordingly.
FCA Research (From Occasional Paper 8 Feb 2015)

Financial services, products and systems often ‘streamline’ consumers and are not designed
to meet nonstandard needs of those who don’t fit into a set mould. The response of frontline staff – whether it’s in a branch or on the phone – is crucial to the
customer’s experience. The firm may have great specialist teams or policies, but if frontline staff don’t deal with the situation appropriately, access to a good outcome may be missed.
Staff on the frontline do not need to be experts, but they need sufficient training to facilitate a proper conversation, to know where internal expertise lies, and know how and when to refer
Most problems relate to poor interactions, or systems that don’t flex to meet needs, therefore
making people’s situations more difficult.
Some consumers are overwhelmed by complex information and can find it hard to distinguish between promotional material and important messages about their products.
In some areas, an inaccurate interpretation or overzealous implementation of rules (such as those around data protection or affordability) is preventing firms from meeting the needs of
vulnerable customers.
Many vulnerable consumers may be valuable customers if firms respond to their needs and treat them flexibly. However, these consumers may withdraw from the mainstream market and
their problems may spiral if their needs are not met.

A good vulnerability strategy will benefit all customers.
In many ways, products and services that are designed in an inclusive way to respond better to the needs of those in vulnerable circumstances will also work better for the majority of
customers, increasing levels of customer satisfaction. So, embedding an inclusive strategy that aims to make services available, usable and accessible to all regardless of personal
circumstances, will lead to better performance for everyone in the longer term and, arguably, greater levels of consumer satisfaction across the board.

Part of the FCA’s role is to protect consumers – fair treatment is integral to this.

Consumers in vulnerable circumstances may be less likely than others to be able to represent their own interests, and more likely to suffer severe detriment if something goes wrong. In order to be treated fairly, customers need well-designed, straightforward to understand products that meet their needs over their lifetime, and flexible service that is able to respond to individual circumstances.


We have a choice of ways of communicating available whenever customers need to make
contact with us and these are designed in an inclusive way so that they are flexible, clear,
easy to understand and meet customer’s needs.

We recognise that each individual is bound within an individual set of circumstances and our
responses are tailored accordingly – it is our intention to always listen carefully, let the
conversation take its course without judgement and ensure the message from the customer is
clearly understood before undertaking any actions.

It is our intention to diligently record information properly so that customers do not have to
be repetitive if they contact us later and we are able to refresh our understanding prior to
making any further contact with them.

We are committed to deal openly and transparently with a vulnerable person’s representative /
carer and be as upfront with any help and information we are legally able to provide – we will
always seek ways to help and not rely on overzealous interpretation of regulations to

For example, If someone is recently bereaved, has a power of attorney or a third party
mandate, we will ensure they receive consistent advice and treatment.

If we suspect a customer is in financial difficulty we will be proactive in contacting the
customer and seek to offer sympathetic assistance and resolution and signpost to free sources
of advice as necessary.

As a business we are committed to changing the way we deal with vulnerable customers that
may not be effective.

We will promote a culture where staff are encouraged to understand and empathise with
vulnerability. We recognise that staff who provide the first point of contact with customers
may not have much experience of people in vulnerable circumstances. Building knowledge of
various vulnerabilities and the number of people involved, encouraging an appreciation of
what life can be like for some people in difficult circumstances and encouraging a desire to
help, is key to this culture. All staff who deal directly with customers need to know enough
about vulnerability to pick up on warning signs or triggers and signpost/refer on
appropriately. It is acknowledged by us that staff cannot be expected to be experts on all types
of illness. Rather they need to spot clues that enable them to refer on to more specialist
assistance. We provide staff training on what to look out and listen for.

We will avoid rigidly scripted responses – staff will have the flexibility to allow a
conversation to develop if they sense that a customer may be experiencing difficulty.

Removing the fear, enabling difficult conversations: It is recognised that our staff may feel
awkward or scared of having conversations around issues such as mental or other forms of
illness, stressful situations and dealing with customers who may be distressed. Therefore they
may not feel able to encourage customers to disclose vulnerabilities. We aim to remove as
much of this fear as possible, via increased understanding, clear guidance on how to respond
and accompanying agents on client calls.

It is acknowledged that there are limits to what we can reasonably do to form a view as to
whether or not a customer has, or may have, some form of capacity limitation. However, it is
good practice, in product literature provided to customers prior to providing a relevant
product or service, to invite customers to disclose (on a voluntary basis) whether there are
any issues relating to their health or general well-being which may be relevant to the
consideration of any product or decision by the firm. Any such invitation should make clear
that the information provided will be used solely to facilitate an informed service being
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 us to consider what reasonable steps might be taken in
order to amend our usual processes to ensure that the customer is treated fairly and a positive
outcome result for the customer.

The design and distribution of new products will take into account the requirements of
vulnerable customers and this will include collecting relevant management information to
monitor the company's performances in treating vulnerable customers in accordance with the
requirements set out in this policy.


We recognise that some of our customers may be categorised as vulnerable, due to either
financial profile or some mental and/or physical impairment.
As a firm we pay due regard to the needs of all of our customers and do not exclude
particular client groups but rather assess every customer or potential customer on their
particular circumstances.


A person is unable to make a specific decision if they cannot understand information about
the decision to be made, cannot retain that information in their mind, cannot use or weigh that
information as part of the decision-making process, or cannot communicate their decision.

A person with mental health problems who is in debt is particularly vulnerable due to their
·  Lack of money management skills
·  A reliance on benefit income
·  Fluctuations in income or inability to work
·  Unmet housing, care or treatment needs
·  Poor communication skills
·  A relationship breakdown


Customers may be recognised as potentially vulnerable through self-identification or through indicators the organisation has identified. All colleagues have a responsibility to remove barriers for customers and should consider this overarching policy when interacting with any customer or potential customer to highlight and identify potential vulnerabilities. Customers must be able to contact us through any of our communication channels and by any reasonable means, which may include asking a third party representative to act on their behalf, to notify us of vulnerable circumstances without any barrier.
Assessing a person’s mental health is complex but needs to be recognised in early contact and addressed appropriately. If we believe a person may be vulnerable, we will ask 3 key

1. Does your mental health affect your financial situations?
2. Does it affect your ability to deal with or communicate with us?
3. Does anyone help you to manage your finances such as a family member?
Signs we look out for when identifying vulnerability in customers:

·  Do they ask you to speak up or speak more slowly?
·  Do they understand what you are saying, or do they miss important bits?
·  Do they appear confused about what is being offered?
·  Do they ask any unrelated questions?
·  Do they keep wandering off the point in the discussion and talk about irrelevant things or
things that don’t make sense?
·  Do they keep repeating themselves?
·  Do they take a long time to answer questions or say that someone else deals with these
things for them?
·  Do they have a language barrier?
·  Do they say they don’t understand their bank statements, a previous phone conversation or
recent written correspondence?
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:
·  An inability to hear or understand what is being said
·  Repeated questions of a similar nature
·  Comments or answers which are inconsistent with the telephone discussion, or which
indicate they have not understood the information which has been provided.
·  Verbal confirmation that they don’t understand or that they require the assistance of
somebody else in making a decision.
When assisting with signing up consumers we 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.

Due to the diversity of the factors that can contribute to the level of customer vulnerability (see 3.1 above) there will not be one approach that can be adopted to fit each circumstance.

The over-riding principle that must be adhered to by colleagues in their dealings with vulnerable customers is that fair outcomes are achieved throughout the customer journey, and any barriers are removed to access our products and services. It is therefore essential that colleagues take a flexible approach as our failures can lead customers to suffer financial and non-financial impacts.

Steps we take if we believe a customer may be vulnerable:

·  We speak slowly, clearly and explain fully
·  We are patient and empathise where appropriate
·  We don’t rush as it may sometimes take the customer time to get relevant information
·  We keep on the subject under discussion
·  We do not make assumptions about a customer’s needs
·  We clarify understanding at every point and always ask if there is anything else they would
like us to explain
· We ask the consumer to explain to us what they understand the agreement to be
·  We offer alternative types of communication – phone, post, email, in person
·  We do not make assumptions that the person we are dealing with is sighted as they may be
unable to read or understand serial numbers or account numbers
·  We do not make assumptions that the customer we are talking to can hear everything we
say as they may have a hearing impairment
·  We always remember that the customer we are speaking to may sometimes be forgetful or
overly trusting and believe that a sales representative is always acting in their best interest
·  We understand that some customers may be lonely and welcome the opportunity just to talk
to someone
·  We give the customer time to explain their circumstances fully and don’t interrupt or appear
·  We also listen for what is NOT being said, for example, lack of questions about cost (
interest rate, lack of commitment, timing of responses, extended silences
·  We always ask if there is a better time to discuss matters as some customers may perform
better at different times of the day
·  We ask if there is anyone else the customer may need to talk to before making the decision.
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 is able to make a decision based on that information. The person will also need to be able to communicate his decision.

The mental capacity of a person may be limited in a way which prevents him 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, we should take account of the customer's circumstances at the time at which the application
or request is made.
We should take appropriate steps to 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 (or be 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.
Financial literacy
Mental capacity is not the same as financial literacy although, in practice, it may often be difficult for us 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 we will apply these vulnerable consumers policy in both circumstances. While acknowledging that there are limits that we
can reasonably be expected to go to in seeking to form a view as to whether or not a customer has, or may have, some form of capacity limitation, it is good practice in literature provided
to customers prior to providing a product or service to invite customers to disclose (on amvoluntary basis) whether there are any issues relating to their health or general well-being which may be relevant to the consideration of any product or decision by the firm.
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 us to consider what reasonable steps might be taken in order to amend our ordinary processes to ensure that the customer is treated fairly and a positive
outcome results for the customer.

Prior to concluding the loan:

·  We ensure that the consumer demonstrates that they have an understanding of the decision
they need to make, why they need to make it and that they understand the consequences of
making, or not making that decision.
·  We ask if they need to discuss the matter with anyone else, or if they would like us to
explain anything else, or if there anything else we can do further to help
·  We are always prepared to repeat anything to clarify understanding
·  We do not assume that the customer fully understands all the implications of the agreement
and explicitly and clearly confirm all the key features
·  We suggest that they talk it through with someone else and offer to re-contact them. If
appropriate we suggest that a third person could be present

Post Contract:

·  If we identify particular communication needs, we store that information so future contacts
are handled appropriately with their permission
·  We record that we are satisfied that the customer completely understood everything that
was discussed
·  We allow customers to make a personal declaration about their capabilities or
communication needs and store this information with their permission
·  Any records that are held are with the full knowledge and consent of the customer and are
deleted when the relationship no longer exists in accordance with GDPR.
If we identify a customer who may be in need of specialist advice which we are unable to
offer, we will refer them to, or we will seek guidance from an appropriate organisation such
·  Stepchange
·  Money Advice Trust
·  CAB
·  Samaritans
·  AgeUK
· Alzheimers Society
· Mind

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