The Money Advice Trust has published a document entitled ‘Understanding and evidencing customers’ mental health problems.’

Almost one in five (18%) people with a mental health problem will be in problem debt, compared to just 5%

of the remainder of the population. The reasons for this clear link between mental health issues and problem debt include:

  • Forgetting to pay bills due to short-term memory issues
  • An inability to concentrate means that people may struggle to read documentation
  • Budgeting is difficult for consumers with reduced problem-solving skills
  • A consumer with anxiety issues may not want to check their bills and financial documents
  • Mental health issues can cause some people to become more impulsive, so they could make inappropriate purchases and loan applications
  • Consumers becoming unable to work due to their condition, and being unable to pay bills and loan repayments as a result
  • Addictions resulting in people spending excessive sums on their addiction and having nothing left to pay bills or make loan repayments
  • Where the condition is particularly serious, an individual may be unable to manage even essential self-care tasks, like washing and eating, and so cannot possibly hold down a job or check their financial position

Staff working in customer-facing roles will inevitably encounter vulnerable customers at some stage. The guide urges firms and their staff that “the collection of mental health evidence should always start with a customer conversation, rather than with a request for a form to be completed.”

This first conversation should then follow the IDEA mnemonic:

  • Impact – what effect has the mental health condition had on the customer’s ability to manage their finances?
  • Duration – how long has the condition lasted?
  • Experience – does the condition recur over a period of time?
  • Assistance – how can the firm assist the customer?

Once the conversation has been completed, and the IDE questions above have been asked, the firm should reflect on what was said and how the firm should approach dealing with that customer in the future.

Some customers with mental health issues may be extremely reluctant to talk about their condition and how it affects them. Here, firms should explain that anything the customer discloses will be used to assist them in the future. By seeking the customer’s permission to make a note of the condition and its effects, the customer will then not need to describe their condition a second time when they next make contact with the firm.

Sometimes the firm might decide they need to go back to the customer to gather information, and on other occasions, the firm might decide to request external evidence of the condition, although the Trust’s guidance warns firms not to automatically request external evidence in every situation. The Trust has a generic Debt and Mental Health Evidence Form that firms can use, but the guidance says firms should “only use the DMHEF where [alternative information] cannot be collected, interpreted, and used.”

Examples of external evidence might include:

  • Prescription forms
  • Benefits award letters
  • Appointment letters
  • Personal care plans
  • Hospital discharge letters

Some of this alternative evidence might contain extremely sensitive personal information. Firms should take care to extract only the necessary and relevant information.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article