Ensuring fair treatment - ethical telemarketing and compliance

Article published: Friday, May 9, 2025

During Mental Health Awareness Week, we’re reminded of the unique challenges vulnerable individuals face on a daily basis. Whether it's keeping on top of household bills, managing debt, or navigating complex services, poor mental health can make even the simplest tasks feel daunting. According to the Mental Health Foundation, 34% of UK adults worry about meeting basic needs, a figure that has been exacerbated by the cost-of-living crisis.

Vulnerability sadly creates an opening for exploitation and makes it easier for individuals to be taken advantage of. At the same time, scammers are becoming more sophisticated, with the use of AI and social media making it increasingly difficult to distinguish between legitimate offers and fraudulent schemes. The Financial Ombudsman reports that fraud and scam complaints are at their highest ever and scams are increasingly targeting vulnerable groups, those often less aware of digital security.

Fortunately, most businesses operate with integrity and seek to treat their customers fairly, working within robust frameworks to ensure regulatory compliance. However, there are exceptions to this rule, which is why regulation plays such an important role in protecting vulnerable individuals against scammers and unethical operators.

What is the role of the Financial Conduct Authority (FCA)?

The Financial Conduct Authority is a key regulatory body in the financial services sector, ensuring firms prioritise fairness and transparency, particularly when dealing with vulnerable customers.

Under its Treating Customers Fairly (TCF) programme, the FCA mandates that businesses act in the best interests of their customers while addressing the unique challenges faced by vulnerable individuals. This is particularly important in areas such as banking, insurance, and investment, where there are potentially significant consequences for customers.

Who qualifies as a vulnerable customer?

According to the FCA, vulnerability can stem from:

• Health: For example, a customer with poor mental health may struggle to manage day-to-day banking.

• Life events: Situations such as bereavement or redundancy may leave someone temporarily unable to make clear financial decisions.

• Resilience: Customers with limited savings may be disproportionately affected by unexpected fees or penalties.

• Capability: Individuals unfamiliar with digital banking may fall victim to scams.

A vulnerable individual may for example be an elderly person signing up for online banking, unfamiliar with the processes and susceptible to cybercrime or phishing scams. Or someone who has been made redundant might need a flexible payment plan from their lender to keep up with loan payments and avoid spiralling debt.

What is the Consumer Duty?

Building on TCF, the FCA introduced the Consumer Duty in 2023, raising the standards for customer care in financial services. The Consumer Duty framework requires businesses to:

• Provide information that is clear and easy to understand, so customers can make informed decisions about financial products.

• Avoid using pressure tactics that might push a customer into accepting unsuitable terms, such as high-interest credit arrangements.

• Regularly review and refine practices to prevent harm to vulnerable customers, such as reassessing the fairness of overdraft fees or early repayment charges.

The Consumer Duty reinforces TCF and the financial services sector's commitment to fairness, transparency, and trust, ensuring it serves the needs of all customers—especially the most vulnerable.

Telemarketing versus phone scams: the importance of ethical practice.

Whilst financial scams have been growing in recent years, most businesses are ethical in their approach. With increasing scrutiny from the FCA, failure to maintain regulatory compliance can result in significant cost both financial and reputational.

Unfortunately, as phone scams are prevalent, telemarketing is often associated with pushy tactics but poor practice can apply to any channel and telemarketing itself is not inherently unethical. Most telemarketing agencies operate responsibly, providing valuable services that connect customers with products they genuinely need.

Some agencies - including our own - are FCA-authorised and therefore strictly adhere to the TCF and Consumer Duty frameworks. Reputable agencies ensure customer interactions are ethical and transparent, avoiding high-pressure sales tactics and prioritising customer care.

Best practices in ethical telemarketing include:

• Transparency: Ensuring customers understand who they’re speaking with and why.

• Empathy: Training agents to identify and adapt to signs of vulnerability.

• Follow-up: Conducting satisfaction surveys or post-sales verification calls to confirm customers are happy with their decisions.

How can businesses maintain regulatory compliance?

Whilst phone scams are common, it isn’t the channel itself that is the issue but how it is used. The phone is in fact a useful tool for businesses in financial services or other regulated sectors looking to validate their practices and ensure they adhere to FCA standards, including TCF and Consumer Duty. It also brings a human approach to an often-digital journey, using skilled, trained agents to deliver high-quality customer care and a sensitive, empathetic customer experience.

There are many ways the phone channel can be used to reinforce and strengthen a framework of regulatory compliance.

As an FCA-authorised business, we specialise in helping our clients meet compliance standards and maintain fair practices. Some examples of our work include:

1. Customer satisfaction surveys: We’ve partnered with major insurers and retailers to assess whether customers feel satisfied with their experiences and products.

2. Post-sales verification: We conduct follow-up calls to confirm that sales processes were clear and transparent, helping businesses identify and address any gaps.

3. Research and insights: By gathering customer feedback, we enable businesses to understand the needs of their most vulnerable customers and adapt their practices accordingly.

It isn’t just about regulatory compliance; good practice is about building trust between businesses and their customers. Customers, especially vulnerable individuals, deserve to interact with businesses that respect their needs and offer clear, honest communication. And businesses also benefit; by focusing on best practice, they avoid legal and financial risks whilst building trust, protecting reputation, and driving their own long-term success.

This Mental Health Awareness Week, remember that while scams sometimes dominate the headlines, they are the exception. Most businesses strive to build trust, prioritise fairness, and promote products that genuinely meet customers' needs and improve their lives.

If you’d like to learn more about how we can help you navigate your compliance challenges, get in touch.