Far too many vulnerable people are at risk because of antiquated legislation that near forces companies to bully them.
A new campaign by the charity, The Money and Mental Health Policy Institute, which I am proud to have founded in 2016, and still chair, is campaigning to change the law.
Finance is a wellbeing issue. Debt and mental health are a marriage made in hell.
You are four times more likely to be in debt crisis if you have a mental health problem than everyone else, and the recovery rate for people in debt receiving some type of mental health treatment is less than half of that for those who aren’t in debt.
The new research we’ve done, based on analysis of the NHS’s huge Adult Psychiatric Morbidity survey, reveals that 100,000 people in debt attempt suicide each year and those in debt are three times more likely to have considered suicide than others. It’s time to change this
Two of the changes Money and Mental Health is calling for are…
Debt threat letters need to stop
The Consumer Credit Act 1974 requires companies to write debt letters in a certain way.
When lenders send letters to people struggling to repay overdrafts, payday loans, credit cards etc, the law says that they must include the following text in capitals or bolded (ie shout at them): “IF YOU DO NOT TAKE THE ACTION REQUIRED BY THIS NOTICE BEFORE THE DATE SHOWN THEN THE FURTHER ACTION SET OUT BELOW MAY BE TAKEN AGAINST YOU [OR A SURETY].” The last thing vulnerable people struggling with debts need is a bunch of near-thuggish letters using language they can’t understand, threatening them with court action.
Thankfully, attitudes to mental health have changed in the last 40 years. It’s time that the legislation on debt letters was updated too. Money and Mental Health is calling on the Government to change the rules, to make letters easier to understand and signpost people to help.
If you agree, sign the petition supporting this at www.moneyandmentalhealth.org/debt-threats.
Regulation of debt enforcers and bailiffs
If creditors can’t get their money back, they often call on debt enforcers/bailiffs to collect what’s owed. While there is guidance on how they should behave, they’re not independently regulated and reports of threatening and unlawful behaviour persist.
Tracey Rogers’ son Jerome, who was a motorbike courier, took his own life at the age of just 20 in 2016, after receiving two £65 traffic fines. Within three months they escalated into over £1,000 of debt after the council passed on his debt to aggressive bailiffs – who clamped his bike so he could no longer work.
Tracey feels strongly that the intimidating letters he received – and the threatening bailiffs who came to the door - were a big factor in his death, rather than the debt itself, and that if the letters hadn’t been so frightening, and if Jerome had been able to get the right support, he would still be here today.
It’s time for independent regulation of bailiffs by the Ministry of Justice to protect those in acute distress from aggressive collections.
Before talking finance, if you need help with suicidal thoughts, contact the Samaritans at any time on 116 123. If you’re worried you or someone else is in immediate danger, call 999 – ask to stay on the line while you wait for help to arrive.
Get free one-on-one help
I’ve been the Money Saving Expert for so many years now my hair is greying. Crucially, I’ve NEVER come across any situation where the debt hasn’t been solvable.
It’s not always quick or easy, but there is always a path. The best route is to get free one-on-one help from a non-profit debt agency. Work things through with www.citizensadvice.org.uk, www.stepchange.org or www.nationaldebtline.org.
If you can’t cope with things then www.capuk.org offer emotional support as well as debt support.
All are there to help, not judge. Don’t let fear or embarrassment stop you. The most common comment I get afterwards is “I finally got a good night’s sleep”.
Know your bailiff rights
Hopefully you’ll be working with a debt counsellor, but even so it’s worth knowing these bailiff and enforcement action rules.
– They can’t turn up at your door without sending a letter first.
– In most cases they can’t force their way in. Once you know they’re coming ensure you keep doors and windows locked. If they turn up, stay calm and don’t be intimidated. They may try and persuade you to let them – you don’t have to. Talk to them through the letterbox if needed. You can record everything in case they break rules.
– They rarely take goods the first time they come, they’ll usually try and get you to make a payment towards what you owe.
– They should leave if you refuse to open the door. If they get aggressive, call 999.
– Bailiffs shouldn’t lie about who they are, climb through windows, break down doors, push past you, or enter when there’s only an under 16 in.
– If they are collecting unpaid court fines, or if you haven’t paid what you agreed on the first visit they can use a locksmith for entry. They should show you a court warrant for this.
Sort through your finances
Get a trusted friend to help if you can’t cope. They could open your mail from creditors to take the panic away, or speak to firms on your behalf.
If you’re struggling to budget look for a bank account or an app that will let you split your money into separate ‘piggybanks’ (like www.monzo.com or www.squirrel.me), to help you stay inside your limits.
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip.