“Banks need to act in their customers best interests”, says Citizens Advice
Friday 17 May 2019
Citizens Advice has responded to the Treasury Committee’s report on consumers’ access to financial services. Its Director of Policy, Matt Upton, gave evidence to the Committee’s inquiry last year.
Gillian Guy, Chief Executive of Citizens Advice, said:
“It is essential banks provide support to their customers – particularly people who are vulnerable due to their health or financial situation. MPs are right to expect this duty of care to be enforced.
“It’s astounding that banks are not currently required to act in their customers’ best interests or pay attention to their specific circumstances. When they spot warning signs of financial difficulty, banks should provide support and set up a phone or face-to-face debt advice session.
“We also know vulnerable consumers are more likely to pay the loyalty penalty. While it’s a good first step to call on banks to report on the size of the loyalty penalty, stronger action is needed to stamp out this bad practice.”
Each year at Citizens Advice we see over 330,000 people with debt issues. On average, these debt clients have just £14 a month disposable income.
Citizens Advice submitted a super-complaint on the loyalty penalty to the CMA in September 2018 calling for the regulator to consider how the problem can be fixed. The CMA’s response to our super-complaint in December said it agreed and had found damaging practices by firms, which exploit unsuspecting customers. The CMA said it wanted to see urgent action.
The most common health issue among Citizens Advice clients is mental health problems. Our research has found that a third (31%) of our clients with mental health problems are finding it difficult to manage financially, compared with fewer than 1 in 9 (12%) of the general population.