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Page last updated at 13:15 GMT, Saturday, 25 April 2009 14:15 UK

Call to help vulnerable customers

By Bob Howard
BBC Radio 4's Money Box

Notes and a Visa card
There is confusion over what firms can do in these situations

Financial services firms should advise elderly people to seek help from relatives before signing agreements, the Financial Ombudsman has said.

There are fears that those suffering from mental health problems could be mis-sold financial products.

However, firms in England and Wales have a legal obligation not to discriminate against such customers.

And charities say that any action firms take must not compromise this legislation.

Caroline Mitchell of the Financial Ombudsman Service told BBC Radio 4's Money Box that cases can be more difficult to adjudicate when a potentially vulnerable individual has signed without consulting anyone else.

"Most companies would expect there to be a friend or relative with someone over the age of 75 but it really is down to the consumer," she said.

"I really think firms should be very careful in situations like this."


Martin O'Brien from Gloucestershire believes his elderly father was not capable of understanding an equity release product sold via an adviser working for Zurich Financial Services.

When he contacted the company after his death, he did not recognise the profile of his father that the firm had built up as someone who planned his financial arrangement carefully.

He told the programme: "He was suffering from dementia, he didn't recognise me on a number of occasions. He was not mentally active."

Zurich says medical evidence did not substantiate Martin O'Brien's belief that his father suffered from poor mental health.

It thinks Mr O'Brien should have registered an Enduring Power of Attorney he had prepared for his father if he was concerned.

Legislation prohibits a bank from discriminating against a customer because of a mental health condition
Paul Ross, BBA

Mr O'Brien said he would have done but he had no idea his father had been seeking investment advice.

The Financial Ombudsman Service found in favour of Zurich.

The possibility of confusion over the capability of customers to make financial decisions goes well beyond conditions affecting the elderly.

Case workers at mental health charity Mind are worried about advice given to individuals suffering from a range of mental health problems and learning difficulties.

Emma Mamo, senior campaigns officer at Mind, said that in some instances advisers seem to have intentionally misled customers.

"We have done research on this where banks have mis-sold products, sometimes for not really understanding the customers but in other instances where they have actually targeted people because they're vulnerable," she said.

However, deciding exactly which customers may need help in making a financial decision is not always easy.

Paul Ross, a director of retail banking at the British Bankers' Association, said bank staff must abide by the law: "Bank staff are not medical experts and legislation prohibits a bank from discriminating against a customer because of a mental health condition."

BBC Radio 4's Money Box was broadcast on Saturday 25 April at 1204 BST.

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