A code of practice to tackle financial abuse

The financial services sector introduced the Financial Abuse Code of Practice to help victims of financial abuse. The voluntary code seeks to raise awareness and increase the sector’s understanding of this form of domestic abuse.

Firms should have their own processes in place to assist victims based on their personal circumstances, but the Code allows for more consistency across the sector in the way financial abuse is handled.

Financial abuse comes in many guises and can take the form of financial control, dependency, exploitation or sabotage. The Code of Practice was compiled by UK Finance’s Financial Abuse Project Group with input from various charities, victim support groups and Government departments.

By implementing the Code, firms are able to provide training to employees and introduce initiatives to help customers deal with any financial concerns. Victims can be reassured that they have done the right thing when disclosing financial abuse and they can be confident that they will be supported throughout the process.

The Code of Practice is made up of six ‘high-level Vulnerability Taskforce’ principles. The Taskforce, which is part of UK Finance, aims to ensure that customers in vulnerable circumstances are treated fairly and with sensitivity.

Raising awareness and encouraging disclosure

The first principle aims to raise awareness within firms of the existence and impact of financial abuse including what financial abuse looks like, which groups and demographics are likely to be most affected and the key challenges faced by victims based on their financial relationships. An industry-wide consumer information leaflet will help raise awareness amongst consumers of the help available from the financial services sector and encourage discussion with their financial providers.

Training

Staff providing advice and support to victims are expected to display empathy and should be keen to develop the skills and knowledge necessary for their role. The Code of Practice includes the training of staff in areas such as:

• empathy;
• awareness of a referral process to a specialist team;
• the ability to recognise the potential signs and effects of financial abuse; and
• the ongoing observation of outcomes for customers.

Firms should also have internal mechanisms to help employees with their own personal financial circumstances and to improve resilience when dealing with customers in similar situations.

Identification and appropriate response

Staff must obtain the customer’s explicit consent before recording any relevant information about the financial abuse. Firms will offer a supportive response to victims, including offering suggestions and ‘signposting’ what the next steps should be. Staff should seek to minimise inconvenience and any distress a customer may feel following disclosure of financial abuse. If the abuse requires police intervention, firms should be quick to trigger the Banking Protocol.

Minimising the need to repeat a story

Firms should advise the customer which areas of the business have been notified and provide them with details. This should be communicated internally so that the victim does not have to relay the potentially distressing details to more than one individual.

Help to regain control of finances

Firms should appreciate that some individuals may not wish to speak as an individual. With the appropriate authority from the customer, firms can liaise with a personal representative. This could be a charity, a victim support organisation, or a family member.

Each case should be treated individually and firms should allow exceptions where appropriate to help victims of abuse. For example, firms may use an alternative address when communicating with victims – this might be a refuge or safe house. Firms may also inform the customer how to authorise temporary third-party management of an account.

To support customers, firms can implement less stringent ID requirements when accessing financial services. This could include accepting non-mainstream documents as proof of name and address where other more standard documents are unavailable. Providing access to a basic account is also a way of supporting victims.

Customers with debt or arrears are supported to prevent further debt, including a review of existing arrangements, charges and fees.

The financial services sector can play an important role in helping victims of financial abuse. It has the ability to offer guidance and assist consumers with regaining control of their finances. By implementing the voluntary Code of Practice, firms can raise awareness internally and develop a sympathetic attitude towards financial abuse.