Exercise care when marketing to 'vulnerable populations'.

• Author: Pry, Carl G.
• Position: MARKETING COMPLIANCE

BANKERS ARE EXTREMELY CONCERNED with Unfair, Deceptive or Abusive Acts or Practices (UDAAP) these days, almost to the point of obsession. Much of the worry surrounds the uncertainty of the whole UDAAP concept, especially around what constitutes an abusive practice. Of particular concern are acts or practices within marketing and advertising; many of the initial enforcement actions around UDAAP have been how products and services are presented. The audiences to whom any particular product or service is marketed to are critical.

Concepts such as "transparency" and "clarity" are important to mitigate UDAAP risk because consumers must be able to make rational decisions. Interfering in a consumer's decision-making ability by misstating or omitting facts can be considered unfair, if not abusive. Consider what groups are particularly vulnerable to this type of interference. Who might not be able (for whatever reason) to effectively choose the best option your bank has to offer?

These groups deserve particular attention to ensure they are treated in the most evenhanded and fair way possible. The following is a partial list of vulnerable classes:

* Older or younger people. Younger consumers, including students, are generally inexperienced with financial products and concepts, and are thus more vulnerable. Some older consumers may exhibit decreasing abilities to understand complex concepts.

* Persons in financial distress, including unemployment, underemployment, or public assistance. Consumers in financial distress for whatever reason can be particularly vulnerable to ideas that are not necessarily "in the interests of the consumer," to quote the "abusive" definition in UDAAP.

* Non-English speaking people. Anytime a consumer is less likely to understand the nuances of complex financial products due to language limitations, the ability to take advantage of that consumer increases.

* Less financially sophisticated people. This is a harder category to define, but it may be a consumer who asks questions...