Customer vulnerability disclosures – new principles for the mortgage sector set a framework for action

With the Consumer Duty now fully in force, the FCA continues to be clear that vulnerable customers should experience outcomes which are no different to those received by any other customers of a firm.

In the context of mortgage sales, where most are originated via brokers, it is vitally important that customers’ vulnerability needs are identified, recorded and shared as appropriate between brokers and lenders.

Yet while there are considerable benefits in doing so, not least helping to ensure customers’ needs are met, uncertainty remains about sharing sensitive information on vulnerability.

To help address this, UK Finance working with members of the Association of Mortgage Intermediaries (AMI), the Building Societies Association (BSA) and the Intermediary Mortgage Lenders Association (IMLA) has developed a set of principles for information sharing between mortgage intermediary firms and lenders .

The principles, which were published on 9 December 2024, came into effect on 6 January 2025.  We encourage firms to use them in considering and agreeing the nature and scope of what vulnerability information is shared, when it should be disclosed, how to disclose it and – importantly – why it should be disclosed.

This last point – why to disclose – aims to address concerns that disclosure might prejudice a mortgage application or lending decision.  It also seeks to ensure focus on improving outcomes for vulnerable customers so that they are no different from other borrowers.

Industry best practice on vulnerability disclosures continues to evolve, and the principles aim to accommodate this. Already, lenders and brokers are working on ways to ensure there are clear signposts on how brokers should disclose vulnerability information to the lender.

UK Finance and the trade bodies involved will continue to maintain a focus on this topic and consider how best to support our respective memberships in responding to challenges in this area.  Consumer Duty requires industry to act on delivering good outcomes for vulnerable customers. The new principles framework can support this.

Area of expertise: