Barclays, Monzo, Nationwide and Metro Bank are joining over 30 charities in calling on the government to change “out-of-date” rules on debt letters, to make them less intimidating.
Research by the Money and Mental Health Policy Institute shows that more than 100,000 people in problem debt attempt suicide in England each year. While there are often many factors which contribute to someone becoming suicidal, the charity said the intimidating letters people in debt receive from lenders are a major factor which can leave people feeling there is no way out.
Rules in the Consumer Credit Act 1974 force creditors to send debt letters which feature intimidating and obscure language, and out-of-date advice to people in problem debt, often alongside threats of court action.
While the content of those letters is designed to appraise the person in debt of their rights and options, it is often cited as a source of distress for customers.
In a joint statement, representatives from Barclays, Nationwide Building Society, Monzo Bank and Metro Bank have backed this call for the government to change the rules on debt letters, to make them less intimidating, easier to understand and more supportive to people in problem debt.
The statement is co-signed by Tom Blomfield, chief executive of Monzo; Joe Garner, chief executive of Nationwide Building Society; Craig Donaldson, chief executive of Metro Bank; Sally Moran, global head of financial assistance at Barclays: “Over 100,000 people in problem debt attempt suicide each year in England alone. While there are many issues that can lead to someone feeling suicidal, research shows that the letters people in debt receive from lenders – which by law must include intimidating and obscure language, and often feature threats of court action – are a key factor that can leave people feeling panicked and helpless.
“As creditors, we are taking steps to make our debt collections letters more supportive, but we are restricted by rules under the Consumer Credit Act 1974, which dictate the content of these letters. Fortunately, this legislation is currently under government review.
“This World Mental Health Day, we’re joining a coalition of more than 30 charities led by Money and Mental Health in calling on the government to change the rules on debt letters, so that we can make them more supportive and easier to understand. That will enable us to help more people deal with their debt and will also save lives.”
The Collections and Vulnerability Summit takes place in Manchester at the Midland Hotel on October 16. To attend, visit its website.