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MSE News: Plans to help credit applicants with mental health problems unveiled

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This is the discussion thread for the following MSE News Story:

" The OFT has published guidance to ensure loan and credit card applicants with mental health problems are treated fairly ..."

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  • tagq2
    tagq2 Posts: 382 Forumite
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    How would banks identify people who may have mental health difficulties (not so difficult that they are regarded as incapable of managing their own affairs)? And would this be processed as mental health difficulties ought to be, in person and considering the needs and abilities of the individual, or as a simple numerical input to the bank's internal calculation of credit worthiness? Someone's mental health may make them reckless, but it may also make them risk-averse and obsessive about good financial behaviour.

    For example, I'd consider it reasonable to be able to request to your financial institution that it make no marketing calls offering credit products and that it not accept your agreement on any credit product without the written agreement of someone who helps you, e.g. a relative/carer/therapist. A little bit of secondary legislation could require financial insitutions to comply with such requests where accompanied by a medical report. This isn't the same as an appointee, who gets to do stuff because you can't do it, nor a Power of Attorney, which allows you to still do stuff unabated unless a later decision is made on your competence. There needs to be less "capable vs incapable" in understanding of mental health, and more recognition that people experience a spectrum of difficulties and could contribute much more to society if they are helped (which sometimes mean being protected) as necessary.
  • Pincher
    Pincher Posts: 6,552 Forumite
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    Ask a used car salesman to refuse to sell to an idiot who is dumb enough to buy his lemons.

    If they actually gave everyone a financial driving license test, to separate the competent from the incoherent, 90% would be disqualified.
  • Pincher
    Pincher Posts: 6,552 Forumite
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    Unless lenders hire an armada of psychiatrists, their assessment is unqualified and arbitrary, making the new rule utter non-sense.

    Hmm, we need to create a financial equivalent of the DVLA.

    You can have an automatic license or manual.

    With an automatic license, you are assumed to be useless, and you can have current and deposit accounts, buy National Savings Bonds, and not much else. ATM and debit cards won't get you into debt.

    With a manual license you can get credit, but it's in categories.
    Group A: Up to £10,000 loans, e.g. credit card
    Group B: Up to £100,000 , e.g. car loan
    Group C: Up to £1,000,000, e.g. mortgage

    There should also be categories for futures, derivatives trading, etc.

    So, when you apply for a loan, or do an investment, or just plain betting, you have to provide your financial license, which tells the provider instantly what you are allowed and not allowed to do. This is the most sensible approach.

    There wil be an underclass of people who will be legally excluded from credit, because they would buy a time share in Spain if we don't stop them. We will be depriving them of their human rights, by the way, which is an interesting aspect of this new rule.

    So, is credit a fundamental human right? Can we withhold it from you if you are easy to sell to?
  • looopylala
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    I am struggling to get my head around this, I am bipolar and have debt from being manic with money and "believing" I can afford it. If I could hide my mental health problems from people who know me then how would a lender know..
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