Financial Conduct Authority: Lenders ‘unclear’ on bereavement policy
Lenders “can improve” their treatment of bereaved customers, the Financial Conduct Authority has said.
The City watchdog has published a framework outlining good and poor practice to help firms “provide the right support” to consumers who are facing difficult times.
The FCA said the introduction of the Consumer Duty in July 2023 has helped provide clarity on policy and procedures, but warned staff remain “unclear on the actions they need to take and how quickly.”
Emad Aladhal, the regulator’s director of retail banking, said: “Dealing with a bereavement or setting up a power of attorney can often be stressful and emotional.
“When banks and building societies get it right for their customers they can make a real difference at a difficult time.
“But when they fail to recognise and respond to customers who need more help, it adds to the stress. All firms should consider where they can make improvements.”
The regulator said some individuals and their representatives were unable to access funds to pay essential bills because of lenders’ lack of clarity surrounding bereavement procedures.
Review found firms unable to meet their own standards
This followed a scorning multi-firm review by the regulator in November 2024, which covered life insurers’ bereavement claim processes.
The review said: “Most firms were unable to meet some of their own bereavement claims process service performance levels within the period we looked at.”
According to the watchdog, this meant claimants were “experiencing delays resulting in poor outcomes and customer harm.”
The FCA recently launched its five-year strategy following the government’s push for growth in the economy. The strategy looks to help consumers navigate their financial lives and decisions better, which will bring banks’ Consumer Duty responsibilities into the spotlight.
Aladhal added: “Our message to consumers is this – if you need to notify your banking provider about a bereavement or a power of attorney, speak to them about how they can support you and meet your needs.”