FCA Covid-19 guidance: responding to requests to access restricted savings

On 5 May 2020, the Financial Conduct Authority (FCA) updated its webpage on "Coronavirus (Covid-19): Information for firms" to include a statement on responding to customers requesting access to restricted savings accounts. This statement is in response to the FCA’s recognition that during the Covid-19 crisis, customers may find themselves needing access to savings in accounts with restrictions on access.

The FCA has stated its expectations that firms should:

• pay due regard to the interests of their customers and treat them fairly (see Principle 6 and BCOBS 5.1);
• communicate in a way that is clear, fair and not misleading (see Principle 7 and BCOBS 2.2); and
• consider the needs of vulnerable customers in their actions or communications (see Principles 6 and 7).

Helpfully, the FCA has made clear that meeting these obligations does not require firms to offer access to all customers, or to offer unlimited access to funds in a restricted-access account. Instead firms may form a judgement on a case-by-case basis, balancing their customers’ needs with their own obligations, including managing their prudential risk.

In making assessments, the FCA has highlighted that firms should be aware that the impact of Covid-19 is likely to exacerbate circumstances that can cause vulnerability, for example due to sudden and significant loss of income (including for consumers who would not normally consider themselves vulnerable).

The FCA’s statement further highlights the importance of firm’s ensuring that their policies and procedures for vulnerable customers are appropriate in light of the current Covid-19 pandemic. In particular, firms should ensure that their vulnerable customer policies require them to consider a customer’s vulnerabilities and the impact that an inability to access funds would have. Vulnerable customer policies should provide for consideration of relevant factors when considering withdrawal requests such as:

• whether the withdrawn funds would be used to pay for essential goods and services; and
• the availability of other forms of income such as Universal Credit.