Banks and energy firms must recognise needs of vulnerable customers as cost of living soars
Citizens Advice is asking essential service providers to deal more more responsibly with vulnerable customers as the cost of living soars.
Regulators too are reminding companies they must identify and reach out to those who show signs of struggling.
Despite efforts to keep up with rising inflation and interest rates, more individuals and families are in danger of missing payments. Providers in the frame are utilities, telecoms, broadband, rental property and mortgage lenders.
Banks have a special duty to their borrowers
Citizens Advice research shows 1 in 4 mortgage holders couldn’t afford to see mortgage payments rise by £100 a month; nearly half (45%) couldn’t afford an increase of £250 a month.
Unfortunately many people choose not to admit they are in trouble. To put off missing a payment they cut back on other essentials including food or use high-cost credit and risk falling further into debt.
To stop this downward spiral mortgage lenders must take the first step. In June the Financial Conduct Authority wrote to all of them: ‘FCA tells lenders to support consumers struggling with the cost of living’.
Energy companies must get on the front foot
It’s sad fact that when pre-payment energy customers have no money to top up they cut themselves off. The options, surely unacceptable in a rich society, are to cut back on food or live in a cold dark home. Such alternatives are well-known to headline-writers as ‘heat or eat’.
How are energy companies responding? Not well enough, according to energy regulator Ofgem. Last week they published research naming and shaming firms for inadequate customer care. Their Retail Director said:
“My message to suppliers today is simple- be proactive. Help your customers to know what support is available, and then deliver it.”
Good customer service is the special responsibility of all essential service providers all the time. In a cost of living crisis we need them to recognise an extra duty to vulnerable customers whatever their situation.