Devastating debt is leaving Britons with suicidal thoughts and Martin Lewis has demanded stronger protection for people behind on their payments.
The founder of Money Saving Expert has worked with the Money and Mental Health Policy Institute (MHPI) to demand action to stop overwhelming correspondence chasing the money owed.
The MHPI, a charity founded and chaired by Mr Lewis, says that 50 percent of people who are behind on bills have experienced suicidal thoughts or feelings in the previous 20 months due to rising costs.
Mr Lewis said: “When done well, contact from creditors can help people to understand how much they owe and gives guidance and assurance about what they need to do next. But some people are being swamped with phone calls, texts and letters from multiple creditors a day – that leaves them feeling overwhelmed and harassed, feeling unable to ever escape the situation.”
The research, funded by the abrdn Financial Fairness Trust, involved a YouGov survey of more than 2,000 adults across the UK in October.
It looked at people’s experiences of falling behind on consumer credit payments, such as credit cards and buy-now-pay-later payments, since February 2022.
The survey indicated that one in 10 people are currently behind on consumer credit payments.
Twenty-four percent of people who have missed payments said they are contacted by their creditors every one to two days. Some people with multiple debts reported receiving several letters, emails or calls each day.
Nearly half of people who are behind on payments said they feel harassed (49 percent) or overwhelmed (48 percent) by the volume of contact they receive from creditors.
Just over nine in 10 (91 percent) people who received five or more phone calls a month from lenders said that this contact had negatively impacted their mental health.
Alongside the polling, Money and Mental Health undertook in-depth research among more than 260 people with mental health problems.
Some research participants said that the frequency of contact they received from creditors contributed to them having suicidal feelings.
One participant said: “Phone calls, receipt of emails and letters demanding repayment sent my anxiety levels through the roof and increased the severity of my depression.”
Money and Mental Health said current guidance from the Financial Conduct Authority (FCA) – which regulates financial services – states creditors should not contact people “at unreasonable intervals”, but a specific limit is not set out.
In the US, for example, creditors are only allowed to call debtors seven times in one week, the charity said.
Money and Mental Health wants the Government to task the regulator with placing limits on how often creditors can contact people about missed payments.
The FCA should also launch an urgent review of this issue, requiring creditors to provide detailed data on how often they communicate with customers in arrears across the full range of communication channels, the charity said.
When lenders can see that someone is likely to be receiving a high volume of contacts from multiple creditors, they should be required to change their approach to that customer and to reduce the risk of distress, the charity said.
Mr Lewis added: “There’s no silver bullet for these issues, but stopping a never-ending overflow of messages to people about their missed payments would make a big difference in reducing the stress that too many people are under – hopefully helping them manage the situation better too.”
Conor D’Arcy, interim chief executive of the Money and Mental Health Policy Institute, said: “Our evidence suggests that there is a tipping point where the volume of messages people get from creditors goes from being helpful to harmful.”
Mubin Haq, chief executive of the abrdn Financial Fairness Trust, said: “There is a real risk that we are dangerously overloading people who are behind with their credit payments.
“High levels of contact from creditors are negatively impacting people’s mental health. Action is needed on a number of fronts and that includes placing legal limits on the number of times creditors can contact people about missed payments.”
