It’s a welcome step, but vulnerability is not just debt. It is broader, encompassing physical disabilities, mental health, cognitive disorders, financial difficulties, mental capacity and accessibility. All of these factors can impact a person’s ability to manage day to day bills and accounts, especially against a backdrop of bereavement, job losses, fraud, economic abuse and long Covid.
The Vulnerability Registration Service has seen the number of people proactively trying to make organisations aware of their vulnerable status increase dramatically over the past year. With 27.7 million adults now displaying characteristics of potential vulnerability, according to the FCA, there is a clear need for long term strategies that will enable appropriate treatment and support for the vulnerable.
Utilities – one step ahead but more is needed
In comparison to other sectors, utilities have already taken some great strides towards identifying and supporting vulnerable customers. The Priority Services Register (PSR) was in place before the pandemic and has gained impetus during it, helped by both CCW and Energy UK launching initiatives encouraging suppliers to commit to doing more for the vulnerable. In both cases, emphasis has been on making people aware of the PSR.
However, the scheme relies on people proactively coming forward to disclose their vulnerability to their providers. It also relies on people understanding that vulnerability is not just physical disability and that their circumstances, permanent or temporary, may be relevant. This is made worse by a lack of trust and general reluctance to disclose details about their vulnerability with their supplier. Many fear it will go against them or they’ll have to keep explaining their painful circumstances to several suppliers, and in many cases, different teams within the same organisation.
Furthermore, when it comes to debt, many people don’t understand priority debt and too often will pay the smaller credit bills that they have delayed for some time, rather than more essential bills, such as water or council tax. Unfortunately, asking for help is not obvious nor easy. It is not enough to just include a paragraph at the bottom of every letter about the support a vulnerable person can access, especially if that person is facing pressure from multiple organisations chasing payment and overwhelmed by their circumstances.
Creating disclosure environments
The PSR is a big step towards addressing vulnerability, but more needs to be done in order for it to have a greater impact among those who are truly vulnerable. Creating an environment that ‘encourages and enables’ disclosure, giving the vulnerable confidence to voice their vulnerability, will be key here as the economy unravels and millions more find themselves in vulnerable circumstances. The sector must aim for an environment that makes disclosure as simple and as routine as updating their contact details.
Awareness of the key barriers
The biggest barriers to disclosure include the perceived consequences (most worry it will continue to impact their access to services), state of mind, previous experience of disclosure to a supplier and attitudes to mental health. These barriers have to be addressed before any effective progress can be made.
A vulnerability mindset
A key part of enabling disclosure from those who are vulnerable is ensuring frontline staff have the skills and mindset to effectively engage with and support vulnerable customers. While it is important that staff are trained to spot, probe and encourage disclosure, a focus on helping people see disclosure as a positive action, rather than one with negative consequences is vital.
An understanding of different vulnerabilities and how they impact a person’s ability to manage life and money, will also help before any engagement. Charities are a valuable resource for creating a better understanding of vulnerabilities and how to engage, from board level to frontline staff.
Spotting potential vulnerabilities at the earliest possible engagement
Being able to identify true vulnerability from those who simply won’t pay or are fraudulent is vital to ensure people are treated fairly. This must happen at the earliest possible stage to ensure that the right resources are focused on the right actions. If providers are not equipped with the right resources to do this, then they must work with third party providers who are. External databases, such as the Vulnerability Registration Service, can flag known vulnerabilities including economic abuse, risk of fraud, over-indebtedness, impact of Covid and power of attorney, to utility service providers at the start of a relationship and throughout, where circumstances change. And better engagement with debt advisors where vulnerability assessments are mutually recognised, will also be key. It is also worth connecting with organisations, such as the Citizens Advice, where people who have not been financially vulnerable before may go.
Working with organisations across the spectrum
One of the painful realities for vulnerable people is having to explain their circumstances over and over again to multiple organisations. There is a need for organisations across the spectrum to work together, share data and signpost individuals towards other third party organisations that can continue to support them further. Water and energy companies are already exploring cross-sector non-financial vulnerability data sharing, but this should extend to organisations outside the utilities sector to include lenders, for example. and third parties that can support and identify customers in vulnerable situations. Such data sharing will play a significant key role.
Conclusion
The PSR is a significant step towards addressing vulnerability and the utility sector is ahead of other sectors in establishing it, but the onus is still largely on those who are vulnerable to come forward. Disclosure is a big challenge for the sector. Creating an environment that ‘encourages and enables’ disclosure, as well as taking practical action to better identify and share data on vulnerable customers, are essential steps to take to reduce bad debt and harm.