Why Gone Away Customers Matter in a Consumer Duty Landscape
With the introduction of Consumer Duty, the financial industry has taken significant steps to improve outcomes for vulnerable customers. The FCA’s recent multi-firm review on how retail banks and building societies treat customers in vulnerable circumstances highlights commendable practices designed to support families and legal representatives following a customer’s death.
At Estatetrace, we’ve seen real progress—but we’ve also witnessed the challenges that arise when customers fall through the net. This includes not just deceased individuals, but also those who have lost mental capacity or disengaged entirely.
When Death or Incapacity Isn’t Reported
Robust processes usually lead to good outcomes when a firm is notified of a customer’s death or a Power of Attorney is in place. However, issues often emerge when no notification is received. While it’s not the institution’s fault, the absence of proactive identification can lead to long-term inactivity—and poor outcomes.
Often these records are marked as ‘non-responder’, ‘dormant’, ‘in suspense’—or more critically, ‘gone away’.
From Dormant to Disengaged: The Data Blind Spot
Unlike the US, where escheatment returns unclaimed assets to the state after just two years of inactivity, the UK sees scenarios where customer records remain untouched for decades. It’s not unusual for pension firms to have accounts that haven’t been active for 30 years.
These customers can easily be lost in the system—particularly in long-term savings or life insurance, where communications may only happen annually or be stopped entirely due to returned mail.
The Digital Dilemma: What Happens When You Can’t Be Found
If I were to be suddenly hit by a bus, my bank cards would likely help my representatives notify the banks. But what about pension or insurance providers, who may only contact me by post? Without access to my email or paper records, these accounts might sit unclaimed for years—especially if ownership is transferred through mergers and acquisitions.
Why Financial Firms Must Play Their Part
While legal representatives can use services like Estatesearch’s Financial Profile Search to locate missing assets, this is only one part of the solution. Financial firms must be proactive too.
In some cases, firms are aware they hold accounts for individuals with improbable ages—sometimes over 120 years old! The FCA review focuses on those known to have died or lost capacity, but what about customers they simply don’t know about?
What You Don’t Know Can Hurt You—and Your Firm
Regular tracing exercises help rediscover and re-engage with ‘gone away’ customers. High discovery tracing can confirm deaths, address changes, or the presence of a Power of Attorney—allowing firms to take appropriate action.
Beyond compliance, there are tangible risks. Recent media coverage has highlighted how US investment firms have exploited disengaged UK shareholders to influence company control.
A Call to Action: Use Tracing to Improve Outcomes
Maintaining accurate records isn’t just good practice—it’s essential. Ensuring engagement isn’t just about regulatory compliance; it’s about customer protection and safeguarding your institution.
The FCA’s report rightly celebrates improvements, but it only reflects the visible landscape. What about the invisible? ‘Gone away’ customers may have died, moved, or lost capacity—but they still deserve good outcomes.
Want to improve outcomes for gone away customers?
Learn more about our enhanced high discovery tracing services for financial institutions:
www.estatetrace.co.uk/contact