The Consumer Protection Code has introduced the concept of “Vulnerable consumer”. The identification of a client as vulnerable will require common sense and should be based on your opinion of the consumer’s ability to make a particular decision at a certain point in time. Where you feel that someone may fall into this category, you need to take additional measures during the Knowing the Consumer/Factfinding process.
The definition of a vulnerable consumer under the Consumer Protection Code is as follows:
A natural person who:
a) has the capacity to make his or her own decisions but who, because of individual circumstances, may require assistance to do so (for example, hearing impaired or visually impaired persons); and/or
b) has limited capacity to make his or her own decisions and requires assistance to do so (for example, persons with intellectual disabilities or mental health difficulties).
The Central Bank’s feedback document provides guidance on the types of consumers who may fall under this category, but ultimately it will be up to you the advisor as to whether you feel that the consumer you deal with falls into this category.
| Categories of Vulnerable Consumers | Examples of Vulnerabilities | |
| 1 | Capable of making decisions but their particular life stage or circumstances should be taken into account when assessing suitability. |
Age, poor credit history, low income, serious illness, bereaved, etc. |
| 2 | Capable of making decisions but require reasonable accommodation in doing so. |
Hearing-impaired, vision- impaired, English not first language, poor literacy. |
| 3 | Limited capacity to make decisions (temporary/permanent). |
Mental illness/intellectual disability. |
Where you feel an individual falls into any of the above categories you should note on file the additional measures you took during the sales process to facilitate the consumer.
Please see Brokers Ireland checklist for vulnerable consumers in Manual 3 – Compliance Document Templates.
Post your comment on this topic.