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The Credit Services Association (CSA)
Blog: ‘Money on your mind’: bringing together creditors and debt collection professionals on prevention of financial difficulty for those with mental health issues
Claire Aynsley is Head of Regulatory and Compliance Standards at the Credit Services Association. Since joining the organisation over 10 years ago, her dedication and passion for the industry have greatly enhanced the status of the Association, forging strong relationships with regulatory bodies and other industry stakeholders to ensure we are at the forefront of any regulatory and legislative changes.
This morning, the MoneySavingExpert Martin Lewis-backed Money and Mental Health Policy Institute (MMHPI) has published its new ground-breaking report on money and mental health: ‘Money on your mind.’ This is something the Credit Services Association, the UK trade body for the debt collection and debt purchase sector which deals directly with customers who are in financial difficulty, has been involved in from its inception. I was fortunate enough to be invited to a roundtable hosted by MMHPI back in April where we discussed how we can identify ‘crisis spending’ amongst customers with mental health issues.
MMHPI’s director Polly Mackenzie will be on a panel entitled ‘vulnerable customers, mental health and debt collection’ at our upcoming UK Credit and Collections Conference in September, where we’ll be bringing together debt collection and purchase professionals, with creditors, debt advisers and other stakeholders to discuss the issue further.
So, what’s in the new ‘Money on your mind’ report and how can we use the intelligence to better understand how debt collection professionals should deal with those with mental health problems and work with other agencies to identify and support them more effectively?
The report looks at nearly 5,500 people with mental health problems and found that for a whopping 72% of them, their condition made their financial situation worse. Over 90% spend more when they are unwell and find it harder to make financial decisions, and nearly 60% take out a loan that they wouldn’t otherwise have! Over 70% put off paying bills and avoid dealing with creditors, and over 50% of them end up seriously behind on payments. This is where debt collection comes in and where we have a responsibility to identify each issue and help customers deal with them.
However, as Polly Mackenzie states below, prevention is better than the cure when it comes to ‘crisis spending’ and we as a sector need to work more closely with creditors to ensure that fewer and fewer of the customers we’re dealing with are victims of the above:
“This study offers us an unprecedented insight into the complex relationship between financial difficulties and mental health problems. Some progress has been made in recent years to improve how people with mental health problems are treated once they are in debt, but little attention has been given to preventing this happening in the first place.”
MMHPI recognises that mental health conditions are episodic and that it is not right to take financial autonomy away from sufferers. Instead, measures such as third party mandates granted to a carer/trusted friend and self-exclusion from risky products, are being explored in a way that can be properly managed and will not result in financial abuse.
We’re taking increasing steps to work more closely with creditors including banks, credit card companies and utility companies, to better understand the customer journey and prevent customers defaulting on payments. Alternatively, when they do default, ensure measures are in place to help support these customers and help them become debt free. As well as the UK Credit and Collections Conference in September, we hold Creditor Forums (the next of which is on 27 July in London) and have launched a new free Creditor membership which includes discounted training and events and direct engagement with debt collection and purchase professionals to help share best practice and input into industry standards.