Martin Lewis launches campaign to end ‘thuggish’ debt collection practices – ‘seek help’
Martin Lewis, through the Money and Mental Health Policy Institute charity he founded, is calling on the government to end its “thuggish” use of debt letters during the coronavirus crisis. Research from the charity revealed that the out of date laws governing the debt letters are contributing to a huge problem.
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According to analysis from the charity, over 100,000 people with problematic debt levels attempted suicide each year in England.
Threatening debt letters from lenders are a major contributor to this crisis and the law governing them ensures that they are as alarming as possible.
Under the Consumer Credit Act (1974), lenders are required to contain threatening language within debt chasing letters, often alongside threats of court action.
The charity detailed that this can even boil down to the font used within the text, as the rules state that capitalisation and bold text should be used.
Because of these worrying realities, the Money and Mental Health institute have launched a “Stop the Debt Threats” campaign, which urges the government to address the issue.
They detail that the problems are especially prevalent at the moment as coronavirus continues to impact the economy.
They warn that this will continue to escalate for the following reasons:
- Many people in debt have been granted a temporary debt repayment ‘holiday’ by lenders, in which they don’t need to make repayments on mortgages, credit cards and loans. But lenders are still forced by law to send intimidating debt letters to anyone they consider to be in arrears in this period — even if they have been granted a payment holiday.
- Even those who have never had financial problems, but have been granted mortgage or other official payment holidays, should by law receive one of these frightening letters after two missed payments. The regulatory authorities are currently looking to work around this law, but this will clearly cause unnecessary distress and confusion.
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Martin Lewis himself provided the following comments as the campaign was announced: “The fact that lenders are forced by a decades-old law to send thuggish letters to people with debt problems is staggering. These l
etters ruin lives, and many lenders say they don’t want to send them, but the law gives them no option.
“In the next few weeks, we’ll have the perverse situation where lenders will be compelled to send threatening letters to millions of people, even if they’ve been given permission for a temporary break from debt repayments.
“That will cause distress and confusion at a time when people in financial hardship, and many struggling with mental health issues, least need it.
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“The government has put support systems in place covering a chunk of the population.
“Yet at such a sensitive stressful time, it needs to change the rules on debt letters.
“It’s a simple change to get rid of a rule that benefits neither lender, borrower, nor the economy — and at this time, without exaggeration, it could save lives.”
The campaign has caught the attention of the Money and Pensions Service, who highlighted that guidance is available for people struggling with issues like this.
Claire Herbert, the Mental Health Policy lead at the organisation commented on the announcement: “At a time of considerable stress, problems with money are another significant threat to people’s overall wellbeing.
“Anyone worried about keeping up with payments should speak to the organisation they owe money to as soon as possible.
“For those already struggling, free and confidential debt advice services are available.
“The first step is to seek help – and the guidance available from our Money Advice Service is a great place to start.”
Anyone struggling with suicidal thoughts can contact the Samaritans for support, guidance and help with the problem.
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