Bank Negara issues Exposure Draft on Fair Treatment of Vulnerable Consumers

06 March 2023

1. promote a culture whereby financial service providers (individually a ‘FSP’ and collectively ‘FSPs’) consider and respond to the interests and needs of vulnerable consumers appropriately in conducting their business and operations; and 


2. set requirements and expectations for FSPs to observe, to provide the appropriate support to vulnerable consumers, consistent with fair treatment outcomes. 

1. a licensed bank;
2. a licensed Islamic bank;
3. a licensed insurer;
4. a licensed takaful operator;
5. a prescribed development financial institution;
6. an approved issuer of a designated payment instrument;
7. an approved issuer of a designated Islamic payment instrument;
8. an approved insurance broker;
9. an approved takaful broker;
10. an approved financial adviser; and
11. an approved Islamic financial adviser. 

1. has the capacity to make his or her own financial decisions but may face challenges in accessing financial services or may require assistance to engage in financial services, for example, a person with disabilities or a senior citizen; 


2. has a low ability to withstand financial shocks, for example, a person who is overly-indebted or has no savings; 


3. is experiencing or has experienced adverse life events resulting in temporary or long-term financial hardship, for example, natural disasters, temporary loss of income, unemployment, or the death/total permanent disability of the main breadwinner; or 


4. has an inadequate level of financial literacy or experience in using financial services or products, or poor language skills, for example, a person who only speaks a language other than Bahasa Malaysia or English, or is illiterate, or a person who is not digitally savvy. 

1. uses, has used or may be intending to use, any financial service or product (i) for personal, domestic or household purposes; or (ii) in connection with a micro or small business¹; or 


2. is insured under a group policy or covered under a group takaful certificate where the premiums or contributions are paid by the person insured or the person covered, as the case may be. 

1. set the right tone by clearly communicating the values and standards upheld by the FSP when dealing with vulnerable consumers; such values and standards are to be consistent with delivering fair outcomes to financial consumers, having regard to the particular circumstances of vulnerable consumers; and 


2. establish and maintain appropriate policies, processes and accountability structures that enable and support the FSP’s staff to meet the needs of vulnerable consumers when carrying out their roles and to ensure that the requirements on fair treatment of vulnerable consumers are adequately reflected in the FSP’s existing policies and processes throughout the entire product life cycle. 

1. understand the needs of vulnerable consumers and ensure its staff have the right skills to take appropriate actions throughout the entire product life cycle, including product design, as essential preconditions to deliver fair outcomes to vulnerable consumers; 


2. assess the needs of vulnerable consumers in its existing financial consumer base and target market, as well as implement appropriate policies and procedures to meet these needs to ensure that vulnerable consumers are treated fairly in accordance with the requirements in the Policy Document throughout their engagement and dealings with the FSP. The FSP must also ensure that the policies and procedures are clearly communicated to relevant staff so that they are implemented effectively; 


3. refrain from engaging in predatory practices in their dealings with vulnerable consumers, including sales and marketing practices that exploit vulnerable consumers such as providing misleading information on risks and returns, which could lead to vulnerable consumers buying unsuitable or poor value services and products; 


4. exercise due care when adopting artificial intelligence and machine learning in credit assessments and risk underwriting to avoid the unfair discrimination or exclusion of vulnerable consumers from accessing financial services and products; 


5. ensure that relevant information about the needs of vulnerable consumers is properly captured or recorded in a manner that would enable the FSP to meet their needs promptly and consistently, and is accessible by staff who may need to refer to such information; 


6. provide its financial consumers with information that is easily accessible on how they can obtain assistance in the event they encounter sudden life events that places them in situations of vulnerability, such as the death or permanent disability experienced by the household’s main breadwinner due to the onset of an illness or accident; 


7. ensure communication with vulnerable consumers throughout the product life cycle is clear and easily understood by vulnerable consumers; the FSP must periodically test and verify the effectiveness of its communication channels for vulnerable consumers and adapt appropriately, where necessary, to ensure communication channels remain accessible to vulnerable consumers throughout the product life cycle. The FSP must also ensure that vulnerable consumers are made aware of the different communication channels available to enable them to communicate with the FSP through a channel they find most effective and convenient; and 


8. regularly monitor and evaluate whether its staff and representatives are responding to the needs of vulnerable consumers and take appropriate actions to address any poor outcomes or make necessary improvements to ensure vulnerable consumers receive fair and equitable treatment.