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Urgent action needed to stop lenders bombarding people who've missed payments, say Martin Lewis and charity

New rules are urgently needed to stop lenders overwhelming people with letters, calls, texts and emails about missed payments. Charity the Money and Mental Health Policy Institute (MMHPI) and its chair, founder and core funder Martin Lewis are calling for the Government to make changes to prevent firms causing unnecessary distress to those already under strain.

There are currently no specific rules around how many times a lender is allowed to contact people who have missed payments. As a result, nearly one in four (24%) are contacted every one or two days, while others with multiple debts are contacted several times each day, according to new research published by the MMHPI.

The charity says this is negatively impacting people's mental health at a time when many are already struggling, with half (50%) of those who are behind on bills saying they've experienced suicidal thoughts or feelings due to rising living costs.

If you're struggling, download our free Mental Health and Debt booklet.

Martin Lewis: 'Lenders have a right to contact those who owe them money – but an overflow of messages is counter-productive'

Martin Lewis, founder and chair of both the Money and Mental Health Policy Institute charity and, said: "While we understand that creditors have a right to contact those who owe them money, it has to be done with a recognition that mental health issues and debt crisis sadly, strongly, feed off each other.

"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.

"That's terrible for the individual, poor for the economy as exacerbating mental health issues adds costs to the economy, and it's unlikely to improve the chances of creditors getting money back either.

"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.

"The concern is heightened due to the cost of living crisis, a time when half of people who are behind on bills say they have felt suicidal too. Our message to the Government and regulators is simple. We need urgent action to prevent creating more unnecessary distress for people who are already under massive strain."

Limits should be placed on how often lenders can contact people about missed payments

Here's what Martin and the MMHPI are calling for in more detail: 

  • The Government should task the financial regulator with setting and enforcing specific limits on how often lenders can contact people about missed payments. Currently, the Financial Conduct Authority (FCA) says that lenders should not contact people at "unreasonable intervals", but doesn't state a specific limit.

    But the MMHPI's provisional insight suggests there is a tipping point when people receive five or more letters and emails a month – 86% of these people say they felt harassed, compared with 47% of those who received four or fewer letters and emails. So the charity says the FCA should launch an urgent review and develop concrete limits based on its findings.
  • Lenders should have to use data to identify if customers are behind on multiple payments before contacting them. Firms have the ability to access data from credit reference agencies to see a customer's debts across different financial products – but they aren't currently required to do this by the FCA.

    The MMHPI says lenders should be required to run these checks. If they then find that the person is likely to be receiving a high volume of contacts, they should change their approach to reduce the risk of distress. This could mean limiting how often they contact a customer and making referrals to debt advice services.

Responding to the charity and Martin's calls, the Government told us it is reforming the Consumer Credit Act to "ensure protections afforded to consumers are fit for purpose" and to "improve how lenders communicate with those in financial difficulty".

If you're struggling to make bill payments, see our Debt problems guide to find out where to get support.

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