Blog: How can the debt collection sector better support customers with mental health issues?
Peter Wallwork is CEO of the Credit Services Association (CSA), the UK trade body for the debt collection sector.
Last week saw the launch of MoneySavingExpert Martin Lewis’ new Money and Mental Health Policy Institute, which has been set up to research and find solutions to the worrying link between mental health and money problems.
As a sector that works directly with people in financial difficulty every day, dealing with those with mental health issues (who are five times more likely to get into debt and take 18 months longer to recover from mental health issues if they also have money worries), is top of our agenda. Big strides forward have been made in recent years but it can’t be underestimated how complex this issue is and how much more needs to be done to ensure we all work together to support people in financial difficulty who are also suffering with mental health problems. We’re already in talks with the institute’s director Polly Mackenzie about how we can share insights from our member companies’ experiences of dealing with these customers.
How do we define vulnerability?
In recent months, we’ve seen various initiatives and reports on vulnerable customers published from the likes of the British Banking Association’s Vulnerability Taskforce and the Finance & Leasing Association/UK Cards Association. This best practice guide is designed to ensure that vulnerable customers are not only treated fairly, but with empathy and sensitivity – but what are these reports really achieving? By singling out ‘officially identified’ vulnerable customers (which is a multi-faceted and complex thing to do) are we not missing the point about all customers deserving the best possible treatment regardless of their circumstances? Vulnerability is difficult to define and by automatically labelling older people or those with a disability as vulnerable may not always be appropriate. Likewise, those who may not be classed as vulnerable (including those with an undiagnosed or short term mental health problem) may actually be in circumstances which prevent them from being able to physically make payments such as poor broadband connection which is completely unconnected with their vulnerability.
We’re working on a discussion paper that will address this issue from a customer service excellence point of view. Rather than vulnerability generally, we will be looking at people in ‘special circumstances’, one of which is a professionally diagnosed mental health issue, so that we can better understand a person’s capacity to make repayments and ensure that all customers are given a fair chance to find the best possible solution for their financial difficulty. The sooner people are freed of financial difficulty, the less likely they are to suffer from ongoing mental health issues. If we assume that all those suffering with mental health issues are unable to pay, we aren’t necessarily helping them.
The reality of dealing with vulnerable customers
The reality of dealing with vulnerable customers from a debt collection point of view is incredibly complex as we saw at our Annual Members’ Meeting in February when we invited a drama group to improvise an interaction between a collector and a vulnerable customer over the phone. When those who do not deal with these calls directly themselves saw first-hand how the ‘robotic’, process-driven nature of compliance-led call handling made things even more difficult for the customer (who admitted to considering suicide), it really brought home how unique every customer and every case is. There can be no one-size fits all approach, particularly when it comes to dealing with customers who may have mental health issues as they may not be in a position to be able to properly disclose their vulnerability. This is why our learning and development programmes are work-based and practical so that these scenarios can be played out.
We know that a big barrier to better customer engagement in the debt collection sector is the widely-held fear and cynicism consumers feel towards our industry. Better education, information and understanding which reassures people that being contacted by a debt collection agency isn’t a negative experience but rather an opportunity to find a resolution for the customer before problems spiral out of control, is important and is something that the media and wider society also have a role in.
Opening lines of communication across the financial services sector
The British Banking Association’s Vulnerability Taskforce report recommended that customers only have to disclose their personal circumstances once for each organisation so that they don’t have to keep explaining their plight to different teams across a bank. However, when customer information is passed on to a debt collection agency, this insight into their mental health and overall vulnerability also needs to be passed on so that any customer contact is made with a full understanding of the issues that the customer is facing and can therefore be managed appropriately. We believe that by working together more effectively as a whole sector – lenders, debt collectors and debt advisers – we can reduce the negative impact on the mental health of customers. However, new EU data protection legislation and other regulation may make this more difficult and we need to find ways to overcome this whilst allowing customers to retain control over their data.
Referring vulnerable customers to specialists
Whilst we signpost customers to various sources of free, impartial debt help and encourage our member companies to do the same, the referral process needs to be much smoother to avoid any unnecessary stress and hassle for the customer. Citizens Advice have highlighted gaps in financial advice, especially for those who are considered vulnerable, in numerous different reports. NatWest is now piloting a scheme to refer vulnerable customers directly to Citizens Advice and we are keen to look at ways that our member companies can create a direct link with debt help.
We look forward to working with the Money and Mental Health Policy Institute to ensure that future legislation does more to enable us to protect those in financial difficulty, offering excellent customer service across the board.