FCA Handbook - CONC 7.2 Clear, effective and appropriate policies and procedures in respect of customers in or approaching arrears or in default

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CONC 7.2 Clear, effective and appropriate policies and procedures in respect of customers in or approaching arrears or in default

Arrears and default policies

A firm must establish and implement clear, effective and appropriate policies and procedures for:

(1)
dealing with customers who are in or approaching arrears or in default;
[Note: paragraph 7.2 of ILG]
(2)
the fair and appropriate treatment of customers, who the firm understands or reasonably suspects to be vulnerable.
[Note: paragraphs 7.2 and 7.2(box) of ILG and 2.2 (box) of DCG]

Customers who have mental health difficulties or mental capacity limitations may fall into the category of vulnerable customers.

[Note: paragraph 2.2 (box) of DCG]

In developing policies and procedures in accordance with CONC 7.2, a firm should have regard to the FCA’s Guidance for firms on the fair treatment of vulnerable customers (FG21/1) (https://www.fca.org.uk/publication/finalised-guidance/fg21-1.pdf).

In developing procedures and policies for dealing with customers who may not have the mental capacity to make financial decisions, firms may wish to have regard to the principles outlined in the Money Advice Liaison Group (MALG) Guidelines “Good Practice Awareness Guidelines for Consumers with Mental Health Problems and Debt”.

[Note: paragraph 3.7r (box) of DCG]

A firm must ensure that the effectiveness of any policies and procedures put in place further to CONC 7.2.1R, and the firm’s compliance with them, is reviewed at appropriate intervals.

In order to comply with its obligations under CONC 7.2, a firm should ensure that the review required by CONC 7.2.4R includes consideration of the full extent of support provided to some customers under this chapter, and does not only assess individual customer interactions in isolation.