How do we define “consumers in vulnerable circumstances”?

If you’ve seen me at a conference this year it is very likely you’ve heard me asked “but who, really, is a consumer in vulnerable circumstances?”

In the energy sector, we work with a definition that combines individual and the market. We acknowledge that the interaction of the two can result in situations where someone can’t protect their own interests, face a higher risk of harm and that the harm itself has a higher impact. Take me for example. I have chronic depression which means I go through periods of having very low mood which, in turn, can impact my working memory. I am significantly more likely to be impacted by aggressive debt collection communications more than someone who does not have my diagnosis because it can result in extending and exacerbating a depressive episode. This means that it is really difficult for me to navigate a long complaints process about the letter because I’ll need to remember all the who, what and wheres of the scenario. I’m exhausted just thinking about it, to be honest. So, in regulatory language, I’m less likely to protect my own interests.

Energy Definition (Ofgem)

When a consumer’s personal circumstances and characteristics combine with aspects of the market to create situations where they are: significantly less able than a typical consumer to protect or represent his or her interests in the market, significantly more likely than a typical consumer to suffer detriment, or that detriment is likely to be more substantial.

When I first put the definitions from across sectors side by side, I was startled by how much more of the complexities of consumer vulnerability were articulately explicitly in the definition of vulnerability within the water sector. (you can read that blog here). This definition specifically highlights the three core concerns at the heart of policy to support consumers in vulnerable circumstances — health, wellbeing, and finances. Of course, we know that these three intersect in important and impactful ways, but I believe policy debates benefit from this explicit statement of concerns. Vitally, the definition in water highlights the importance of an inclusive service. Placing a concern about inclusivity at the heart of their definition, the water regulator has not only defined the issue but also flags the solution.

Water (Ofwat)

A customer who due to personal characteristics, their overall life situation or due to broader market and economic factors, is not having reasonable opportunity to access and receive an inclusive service which may have a detrimental impact on their health, wellbeing or finances.

I also want to highlight the definition that comes from telecommunications which contain the vital narrative of the harm caused by isolation and a feeling you can’t participate in society. This has a huge impact on people’s wellbeing and makes sure that we remember the public health challenges linked to loneliness. Reflecting on a feeling you can’t participate in society reminds me of interviews with people who can’t afford to heat their homes feeling they can’t have their family or friends visit in case they see them living in a single room with a tiny electric radiator.

Telecommunication (Ofcom)

Vulnerability is about people’s circumstances, which can change over time… They may become isolated if they are unable to keep in touch with family and friends. They may not be able to participate as fully in society as they would wish.

Despite the important features of life as a consumer in vulnerable circumstances from water and telecoms, considering definitions beyond my own sector came as a result of reading work from the Financial Conduct Authority (FCA). In plain English it discusses harm; the importance of understanding interacting factors; the role of firms and the centrality of firms.

Financial Services (Financial Conduct Authority)

A vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to harm — particularly when a firm is not acting with appropriate levels of care.

After all, it is firms that decide which languages to provide services in. Whether they have specialist processes for people impacted by domestic violence. It is their choice about how many times to try and encourage someone to contact them to talk about a bill before sending out the bailiffs to bang on the door. Failing to act with care can cause inexcusable levels of harm. On the flip side, the support of empathetic staff with tools and customer journeys designed with care can be life-changing for customers. Firms who prioritise inclusive services will minimize the probability of creating or exacerbating harm.

This focus on firms is, to me, is the defining feature of our debate on vulnerability in essential services as distinct from social policy debates around fuel poverty, water poverty or data poverty. Rightly, social policy is the focus of battling poverty in all its forms. The role of the regulated firms as designers and managers of how people are interacting with essential service markets. But what is less easy to see — and much more complex to solve — are the ways that regulatory policy allows the actions of firms which exacerbate inequalities in society. Ideally, then, I’d argue that a definition needs to acknowledge the role of firms, the role of personal circumstances, the impact of market design and the context of economic structures.

That is often inequalities of income but also includes inequalities of accessing and using essential services. This messy, intersecting and complicated space is where I spend my professional life. As I read through these different definitions I wonder if they do more good — shaping their individual sectors — or harm. Harm in making it more challenging for decision-makers to impact people’s lives. Harm in accessing support because people find it difficult to know which firms offer what kind of support. Harm in building barriers between how people experience vulnerability — which is often consistent — and how regulators and firms debate how to respond.

On balance, I think a single definition of vulnerability across essential services across regulators would support our work to design markets that are fair for all. So I’ve drafted a first go — what do you think?

Elizabeth’s definition

Someone who, due to interaction of personal, market or economic factors, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care to deliver an inclusive service.