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More limits should be put in place over debt collector contact, says charity

Repeated contact from creditors and debt collectors can leave people who owe money feeling bullied and and unable to see a way out of their situation, according to the Money and Mental Health Policy Institute (picture posed by model/Dominic Lipinski/PA)
Repeated contact from creditors and debt collectors can leave people who owe money feeling bullied and and unable to see a way out of their situation, according to the Money and Mental Health Policy Institute (picture posed by model/Dominic Lipinski/PA)

Repeated contact from creditors and debt collectors can leave people who owe money feeling bullied and unable to see a way out of their situation, according to a charity.

The Money and Mental Health Policy Institute, a charity chaired and founded by consumer champion Martin Lewis, is urging the Government to charge regulators with limiting how often debt collectors can contact people.

The charity is also calling for the Government to quickly update its national suicide prevention strategy.

The current version makes few references to financial difficulty as a contributing factor to people becoming suicidal, Money and Mental Health said.

A survey of more than 2,000 adults in November for the charity found 17% had experienced suicidal thoughts or feelings over the previous nine months as a result of the rising cost-of-living.

More than one in 10 (11%) people said that they dread opening the post from banks, energy companies and other creditors.

Money and Mental Health also surveyed more than 200 people with lived experience of mental health problems.

One person who took part, described how on one day recently he received seven contacts in seven hours from a single debt collection agency.

This included two text messages, two emails, a letter and two phone calls, which he said left him “feeling harassed and persecuted”.

He said: “The sheer number of contacts scares me, it’s almost as if they are threatening and bullying me into compliance. They have me at the point of not answering calls and removing my sim so they can’t contact me. I am becoming more reclusive as a result.”

Money and Mental Health said that while guidance states creditors and debt collectors should not contact people in arrears “at unreasonable intervals”, it does not stipulate how often is too much.

The charity also highlighted the cumulative impact on people of being contacted by multiple creditors about debts.

Mr Lewis said: “We know that being bombarded with letters, calls and threats of court action from debt collectors can lead people to feel hopeless, helpless and even contribute to people becoming suicidal.

“So, the sooner there are specific protections put in place to limit how and how often debt collectors can contact people about missed payments the better – even the bastion of free markets, the USA, has tighter rules on that than we do.

“It’s been 10 years since the Government published its national suicide prevention strategy, and a new version is due imminently.

“We need the Government to move quickly in publishing that, and hope that within it there is a recognition that financial problems are one of the broad drivers of suicide.

Martin Lewis
Martin Lewis (Jeff Overs/PA)

“It then needs to ensure that it has a serious package of measures to tackle the suicide risk that the cost of living crisis is causing.”

Helen Undy, chief executive of the Money and Mental Health Policy Institute, said: “It’s vital that the Government acts quickly to stop people being deluged in this way. Acting now could genuinely save lives as the cost of living crisis deepens in the coming months.”

People who are in emotional distress can contact charities such as the Samaritans. Help with debt problems is also available through charities such as StepChange and Christians Against Poverty. National Debtline, run by the Money Advice Trust, also offers free, independent and confidential help with personal debt.

A Treasury spokesperson said: “We understand the negative impact financial troubles can have on a person’s mental health, and the Government is committed to supporting those in problem debt.

“Through our breathing space scheme, we have protected over 100,000 people who are unable to afford their debt repayments by pausing enforcement action, creditor contact and most interest, fees and charges for a 60-day period, giving them time to find a debt solution that works for them.”

In 2020, the Government introduced legislation which updated the content of default notices sent to customers who are behind on payments, to make them less intimidating and easier to understand.