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Debt and mental health

This month Ombudsman news looks in detail at debt and mental health. The ombudsman explain that there is a long established link between mental health and debt. Research suggests that half of people who have a debt problem also have a mental health problem.

The Ombudsman receive a wide range of complaints demonstrating the link between money and mental health. One case study looks at Mrs P, a consumer whose son complained on her behalf as a firm hadn’t treated her sympathetically.

  • Mrs P had fallen behind on repayments following a period of poor mental health.
  • She wrote to her bank explaining the situation and asking them to write to her as she struggled talking on the phone. The bank wrote back to Mrs P asking her to call them.
  • This upset Mrs P and she wrote to the bank again asking them to speak with her son.
  • The bank continued to write letters to Mrs P threatening debt collection visits and insisting that she needed to call them.
  • When Mrs P’s son complained the bank said they had acted fairly and reasonably.

The complaint was escalated to the Ombudsman who were concerned to see that none of the bank’s correspondence acknowledged Mrs P’s situation. The bank said they had passed the account to their specialist vulnerable customer team and they thought they had acted fairly in recovering the sums owed to them. The Ombudsman told the bank to pay Mrs P £250.00.

This scenario could have been prevented by the bank’s front line staff listening to the customer and making adjustments. Something as simple as writing to a customer rather than using the telephone can make their experience much easier. Barriers should have been removed to allow the customer to appoint a third party to deal with the matter on her behalf. Staff should go further and if it is clear a customer needs support they should be signposted to appropriate agencies.

The real lesson to be learnt here is that dealing with vulnerable customer and mental health cannot be a box ticking exercise. Firm should promote a culture where staff understand the connection between mental health and debt problems and are equipped with the knowledge and skills to deal with them.

For further information contact Laurie Kershaw 


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FCA & Consumer Credit Regime DWF help you navigate through the changes.