Suicide - Duty of Care

Thrugelmir

bcole wrote: »

A mortgage is the biggest purchase you will ever make, it needs to be very carefully thought out and structured, not just handed out like confetti.

Then there also has to be a return to personal responsibility. Conrad makes some valid points. A mortgage is a long term commitment. Life is a roller coaster of events. All of which are unpredictable and unforeseen.

Managing ones finances is a balance. You seem to have an issue with irresponsible lending. Yet many current issues and those going forward are being created by a lack of a savings culture. An ability to support ones self in difficult times.

bcole

Thrugelmir wrote: »

Then there also has to be a return to personal responsibility. Conrad makes some valid points. A mortgage is a long term commitment. Life is a roller coaster of events. All of which are unpredictable and unforeseen.

Managing ones finances is a balance. You seem to have an issue with irresponsible lending. Yet many current issues and those going forward are being created by a lack of a savings culture. An ability to support ones self in difficult times.

You miss my point, irresponsible lending is bad and so is irresponsible borrowing. 125%ltv Mortgages were wrong on both sides in my opinion. I have always liked the 10% deposit rule and three times your wage and one of your partners. That to me is sensible lending and borrowing, it is a two way street in my opinion.

But my point is, is that if circumstances change, (change meaning something huge relative to the particular person) and the bank/credit agency/finance house are made totally aware at the time, they can arrange structured help. Then keep a flag raised, so if there is any variation away from standard repayments, perhaps a nominated family member/friend etc is made aware.

Disclosure of any mental health/risk issue should not be mandatory, but if you want it, it should be avaliable.

It is purely about at risk people, helping other people, looking out for others.

bcole

Conrad wrote: »

As long as in a few years we don't then get thread titles such as;

'My Son with mild autism discriminated against and declined mortgage even though he's prooved he can affort it'.

No dig at you, just saying things are not as black and white as we might think.

The point you make is good in a way Conrad, but when you are pushing for something like this, you cover all these bases too. Thats why you cannot just write a letter overnight, thinking that will solve it, I did not assume half a sheet of A4 would cover it.

You make sure disclosure is not mandatory, discrimination is not present. It is so detailed but needs to try to cover everyone, not look on the negative and think if we cover that group we will leave others vunerable because of these actions. We need to look after everyone (maybe impossible - but you have to try, try a bit more, talk to others, keep trying, change it a bit, re-evaluate)

It is just trying to realise that all people matter, everyone needs safegaurding. As I say it is being done by Mind at present and they have been on this for years, so lets hope its as comprehensive as it needs to be to cover everyone and and expose no-one. If it doesn't then we'll keep trying till we get it right!

ILW

Problem is that as soon a any legislation tries to cover this situation, a clause will appear in every mortgage and loan application along the lines of "Have you ever suffered from or been diagnosed with a mental illness" and a yes will mean instant decline.

bcole

ILW wrote: »

Problem is that as soon a any legislation tries to cover this situation, a clause will appear in every mortgage and loan application along the lines of "Have you ever suffered from or been diagnosed with a mental illness" and a yes will mean instant decline.

The aim is to safeguard all people with no discrimination against anybody. Or perhaps we should just leave it as it is and let many many people suffer, I think the trying to help everyone is the best direction to head in, it is for me.

It is not black and white as someone has said before but very intricate and comprehensive. But if you are worried, why not contact Mind to speak to them about what they are doing.

dunstonh

The aim is to safeguard all people with no discrimination against anybody

It may be a valid aim but you have to consider reality.

Or perhaps we should just leave it as it is and let many many people suffer

Who is suffering? I think you will find that the minute a firm knows someone is suffering a mental illness, most will act fairly and carefully. In this case, with mortgage payments being met there was nothing to let the mortgage lender know there was an issue. Perhaps a family member should have told the lender if they knew it was a problem?

Thrugelmir

bcole wrote: »

You miss my point, irresponsible lending is bad and so is irresponsible borrowing. 125%ltv Mortgages were wrong on both sides in my opinion. I have always liked the 10% deposit rule and three times your wage and one of your partners. That to me is sensible lending and borrowing, it is a two way street in my opinion.

The majority of people who obtained together mortgages already had unsecured debt. The additional debt remained unsecured. So the mortgages were not actually 125% LTV.

People fall into distinct camps when it comes to managing monetary affairs. For simplicity lets's call them risk takers and security seekers. A risk taker even if their slate is wiped clean has a probability of reoffending at a later date. Its in peoples natures, their genes. Much in the same way that accountants and sales people are like chalk and cheese.

What's required is education on a broad level. So that people understand finance. The realities of what's required to buy a property, fund a decent pension, provide savings for periods of ill health, lack of employment, loss of a partner etc.

bcole

dunstonh wrote: »

It may be a valid aim but you have to consider reality.



Who is suffering? I think you will find that the minute a firm knows someone is suffering a mental illness, most will act fairly and carefully. In this case, with mortgage payments being met there was nothing to let the mortgage lender know there was an issue. Perhaps a family member should have told the lender if they knew it was a problem?

Exactly it is a valid aim but you do not know the reality....until you try. As long as you try that is the main thing.

A lot of people out there are suffering unfortunately and you are so right they do act fairly when made aware, brilliantly in fact! In this case, the family did let the relevant people know, and everyone helped enormously. But its the after care I am talking about, if you read previous posts in this thread you will see what I am talking about. See what Mind is doing.

It is not about one particular case, blame or anything like that. It is about trying to get awareness, that hopefully leads to change, thus helping thousands of at risk people, human lives.

bcole

Thrugelmir wrote: »

The majority of people who obtained together mortgages already had unsecured debt. The additional debt remained unsecured. So the mortgages were not actually 125% LTV.

People fall into distinct camps when it comes to managing monetary affairs. For simplicity lets's call them risk takers and security seekers. A risk taker even if their slate is wiped clean has a probability of reoffending at a later date. Its in peoples natures, their genes. Much in the same way that accountants and sales people are like chalk and cheese.

What's required is education on a broad level. So that people understand finance. The realities of what's required to buy a property, fund a decent pension, provide savings for periods of ill health, lack of employment, loss of a partner etc.

Off the thread point a little but at the end of the day you are so right, Education is the key, I have been saying that for a long time. It should be (if it is not yet) in schools, get people at a young age, before the problems start. It probably would help reduce a lot of posts on here!

bcole

Hope this helps and probably best if stops this thread now, the kind people at Mind mailed me this, quite long but as we have talked about it needs to be comprehensive to cover a lot of other bases. Read in to it and perhap contact Mind if you have any concerns, really are a nice bunch of people. If the really nice people I have been talking to at the mortgage lender get together with Mind, I think they may have some common ground from what I have found so far.

Anyway here it is

About Mind
Our vision is of a society that promotes and protects good mental health for all, and that treats people with experience of mental distress fairly, positively, and with respect.
The needs and experiences of people with mental distress drive our work and we make sure their voice is heard by those who influence change.
Our independence gives us the freedom to stand up and speak out on the real issues that affect daily lives.
We provide information and support, campaign to improve policy and attitudes and, in partnership with independent local Mind associations, develop local services.
We do all this to make it possible for people who experience mental distress to live full lives, and play their full part in society.
General comments
1. Mind welcomes the opportunity to contribute to the Business, Innovation and Skill Committee inquiry. The ways in which people are encouraged, empowered or assisted to manage their borrowing and deal with their debts can play a vital role in how these issues impact on their mental health.
2. Access to credit and financial services is increasingly a core component of modern life and can actively enhance people’s lives. The majority of people with mental health problems have the skills and ability to manage their finances. We do not want people with experience of mental distress to be excluded from accessing credit, however there is a need for adequate safeguards to protect people’s finances when they are unwell.
3. Mind’s campaign ‘In the red: debt and mental health’ has been calling for improved creditor policy and practice towards debtors with mental health problems since 2008. Mind would caution against regarding mental health as a niche issue affecting only a small number of consumers who require separate, more sensitive treatment. Given the circular relationship between debt and mental health [1] and the common nature of mental health problems – which ranges from anxiety and depression through to more severe conditions like schizophrenia – this is very much a mainstream issue and creditors should ensure the way they treat all consumers will not trigger or exacerbate mental distress.
4. Measures to discourage irresponsible lending and borrowing and to make dealing with debt more manageable are important in terms of reducing the risk of people getting into debt that may be detrimental to their mental health, or getting into excessive debt as a result of their mental health.

Specific areas of concern
5. These comments cover many of the areas examined as part of the Government’s consultation on Managing, Borrowing and Dealing with Debt (the Consumer Credit and Personal Insolvency Review) as well as some other key areas of concern.
6. Mental capacity
6.1. Earlier this year, Mind repeated the survey which informed our ‘In the red’ report. [2] Although the data from this survey have not yet been released, we believe it is important to flag up one area of results around mental capacity. [3]
6.2. Only about 50 people from almost 500 respondents to a question on this issue reported that creditors were aware of their mental health problem at the time of taking out credit, although our data do not indicate whether this is because the borrower told the creditor this, or whether the borrower felt their creditor had assumed this without it being said.
6.3. Very few respondents reported creditors asking questions about their mental health at the time of lending. Only three per cent of all respondents reported creditors expressing concerns about their ability to manage the loan or credit as a result of their mental health problem(s).
6.4. However, this lack of awareness, enquiry and concern about the mental health of applicants for credit was not reflective of how respondents felt their mental health impacted on their ability to make an informed decision about borrowing. This was an even greater issue for those respondents in problem debt, as might be expected:
6.5. Three in ten respondents said they were not able to make a reasonable decision about whether to take out the loan or not. This increased to four in ten among respondents in problem debt (defined as being two or more consecutive payments behind with a bill).

6.6. A quarter of all respondents said they were not able to understand the terms and conditions of the loan. Among respondents in problem debt, this figure increased to a third.

6.7. Over a third of all respondents and almost half of those in problem debt reported not being able to ask questions or discuss the loan with their potential creditor.
6.8. While none of the above statements give a definitive indication of an individual’s mental capacity to take out credit, mental capacity is certainly a pertinent concern flowing from these findings on individuals’ self-reported ability to make an informed decision about borrowing. The Office of Fair Trading has recently published draft guidance to creditors on mental capacity and irresponsible lending. This guidance tells creditors what to do if they might reasonably suspect a prospective borrower lacks the capacity to borrow.
6.9. Importantly, it is not simply a case that creditors should withhold credit from anybody who has difficulties understanding the terms of the credit they wish to take out. Rather, creditors are expected to provide support to anybody experiencing such difficulties, so that they acquire the capacity to make a reasonable decision. If an individual then still appears to lack capacity, the creditor is expected to ascertain whether this is the case.
6.10. Given this regulation, the above survey data suggest that there is much for creditors to do in terms of supporting customers – including but not limited to those with mental health problems – who may not have the capacity to make an informed, reasonable decision about whether to take out credit. A key part of this process is ensuring that adequate explanation of the terms of credit are provided, taking into account the difficulties that the customer may face in understanding these.
7. Advertising of credit
7.1. Mind would support moves to ensure that advertising of credit makes clear the risks of taking on debt. People may well get into debt as a result of a mental health issue, for example when seeking relief from low moods by spending, or as a result of disinhibited spending during a manic phase of their bipolar disorder. As such, it is important that credit is not advertised as an ‘easy option’ for those facing complex or difficult circumstances.
7.2. Many people have reported to Mind that their problems with debt started because it was simply too easy to find credit. It was often the case that people were not even looking to borrow money but they were enticed into borrowing through advertising which presented credit as being highly accessible to anyone. Irresponsible borrowing could not happen without irresponsible lending.
7.3. "Apart from a couple of the bank loans all the debt came though the post, you know ‘Apply today for our credit card’. So I did. I didn’t go out and actively seek the credit, it was just too easy to fill out the form and then post it"
8. Information on credit
8.1. Mind would welcome steps to ensure that consumers have access to as much information as possible about potential sources of credit, particularly when those available to them are not mainstream sources. Our research suggests that people with mental health problems can be particularly vulnerable to high cost lenders, often because these sources of credit seem most accessible rather than because they are necessarily the only available options. As discussed above, people will often just take credit that is offered to them, without knowing whether the terms and rates that they are taking on represent a fair and competitive deal.

8.2. The option to directly compare creditors would allow consumers to make a more informed decision which should help them avoid getting into debt that will be detrimental to their mental health or taking on damaging debt as a result of impairment caused by their mental health problems.
9. Code of practice for lenders
9.1. Mind would welcome a code of practice for home credit suppliers, payday lenders and pawnbrokers and would be keen that it included reference for dealing with customers with mental health problems in terms of avoiding causing problem debt for such customers; knowing how to deal with disclosure of mental health problems by indebted customers; and having appropriate policies in place to recognise the additional difficulties those with mental health problems may have in accumulating and paying back debts.

9.2. We would suggest that any such code of practice was in line with the Money Advice Liaison Group’s guidance on debt and mental health; [4] and the Royal College of Psychiatrists’ research into debt collection and mental health. [5]
9.3. We would also be keen that that any such code of practice was enforceable and that meaningful action could be taken against lenders/creditors/pawnbrokers who contravened it.
10. Sharing of data
10.1. We recognise that many people with mental health problems have debt difficulties relating to utility companies and local authorities. We believe that the way in which these problems are managed by these companies and authorities could be vastly improved. However, we would be wary about the sharing of information regarding a customer’s mental health between companies, organisations and bodies due to the negative impact that this could have on the customer’s ability to secure credit and other services. Any such sharing would need to involve the customers consent and full explanation of what the implications might be for the customer.
11. Penalty charges and interest
11.1. Many people have reported to us that debt can become hard to manage due to factors such as penalty charges and excessive interest. Such measures by creditors can make it virtually impossible for people to manage their debt, which in turn can lead to the triggering or exacerbating of a mental health problem. This scenario is often described as a ‘debt spiral’.
11.2. "Several companies have been quite obstructive and obviously delayed dealing with our communications to heap on charges and higher interest to our outstanding debt to recoup the 'interest and charges free' period of repayment plans in advance. It has been an extremely stressful time - there have been several times when we have questioned whether it has been worth carrying on."
11.3. We would welcome the introduction of measures to both limit such charges and interest, and require banks and other creditors to respond quickly and effectively when it is clear that someone’s debt has become problematic as a result of such factors. Since this is not simply and issue with mainstream creditors, we would also be keen to see credit caps for all forms of credit and not just for credit and store cards
12. Regulating bailiffs
12.1. Mind has been calling for effective regulation of bailiffs since our ‘In the red’ report in 2008. Our report suggested that bailiffs can cause immense distress to people in debt, often through behaviour that is illegal or in breach of industry codes but there is insufficient regulation to challenge such behaviour.
12.2. "An analysis of 500 case reports from Citizens Advice Bureaux in England and Wales found that 64 per cent of bailiffs were felt to have been exhibiting behaviour of harassment or intimidation, 40 per cent misrepresented their powers of entry, 25 per cent threatened debtors with imprisonment and 42 per cent charged excessive fees." [6]
12.3. We also carried out some additional research on people’s experience of dealing with bailiffs which yielded more than 450 responses. [7] Below is a summary of the findings.
Bailiffs’ behaviour
12.4. Respondents reported inappropriate, heavy-handed and in some cases unlawful behaviour by bailiffs, including:
· Threatening behaviour such as intimidating children while the debtor was not at home
· Forcing their way into debtors’ homes
· Almost a third of respondents had been threatened with prison
· Being dismissive when people tried to disclose mental health problems
· Being reluctant to discuss options for repaying the debt with the debtor
12.5. A mere 10 per cent of debtors felt bailiffs listened to them, while almost 80 per cent felt bailiffs exhibited threatening behaviour.
Impact on mental health
12.6. Overall, 94 per cent of respondents said contact with bailiffs had a negative impact on their mental health. When asked about what kind of impact this had:
· 95 per cent reported an increased level of anxiety
· 63 per cent felt less able to manage their mental health
· 87 per cent reported increased levels of depression
· 50 per cent experienced suicidal feelings
12.7. We would be in favour of regulatory powers with genuine capacity for discouraging such behaviour and effectively challenging it where it occurs. Efforts to regulate this industry should also involve limiting current powers allowing bailiffs to force entry into a debtor’s property and to tackle where bailiffs are misusing their powers or misrepresenting the legitimate scope of their powers. We also encourage the Government to work with Mind to ensure regulation is appropriate to the needs of people with mental health problems give our findings.
12.8. Specifically, we believe any regulation needs to include:
A fair and proportionate fees structure, which does not penalise people with mental health problems who may be unable to engage with the earlier stages of debt recovery due to their condition, rather than unwillingness, but therefore automatically fall into higher fee bands.
Mental health awareness training as a licensing requirement for all enforcement agents, to equip them with the necessary awareness and skills to ensure debt recovery tactics do not worsen debtors’ mental health (and ultimately make recovery more unlikely)
Revised National Standards for Enforcement Agents which explicitly address the links between debt and mental health and the responsibility of enforcement agents not to cause harm to the public – including causing further mental distress
A referral mechanism for vulnerable debtors, so enforcement agents can pass debts back to creditors where debt recovery by bailiffs is inappropriate – but without enforcement agents being penalised by losing their anticipated collection fees
Clear and easily accessible information on the rules – those who come into contact with enforcement agents are entitled to know their rights and how they can complain if these rights are breached
An industry-wide code of practice and complaints procedure, which is sufficient robust to improve practice throughout the industry, and is fully accessible to people with mental health problems to enable people to report poor practice
13. Debt advice
13.1. For debtors with mental health problems, it is important that advice and support is carefully targeted so that they are aware both that such support and advice is available and would be of help to them, and where they can find it. We have suggested providing more access to debt advice and support within primary healthcare settings but we would also welcome more emphasis from banks and other creditors on targeting support at vulnerable customers.
13.2. Debtors with mental health problems need to feel that their circumstances will be recognised and by creditors and that advice and support will help them to manage their debt more effectively. Ideally, certified sources of advice and support would have adequate profile for most people to be aware of the services on offer. This would also help ensure that debtors are getting the ‘right’ advice.
14. Temporary relief
14.1. We would greatly welcome the opportunity for people to receive temporary relief from creditors when they get into difficulties, either because of deterioration in their condition or because of some kind of income ‘shock’. Often, as a result of creditor action or an unexpected expense, people’s debt can snowball and this can be hugely damaging for their mental health. Such scenarios can lead to people feeling that things are out of control which can cause significant anxiety and could trigger more severe mental health problems.
14.2. Having the time to understand their circumstances and seek appropriate advice and support at times of difficulty could help to prevent people’s debt becoming a serious problem, which could help avoid repercussions in terms of mental health problems.
Supporting information
Relevant findings from Mind’s ‘In the red’ report (2008)
Creditors often threaten or use legal action to put pressure on those in debt. Mind found that of those respondents who had missed two or more consecutive payments:
· 78% had been threatened with legal or court action
· 51% had been contacted by bailiffs or debt collectors
· 25% had received a County Court Judgement
Mind’s report shows that for many respondents who had slipped into problem debt, the fear of legal action against them had a significant and negative impact on their mental health. However, more than two thirds of people did not tell creditors about their mental health problems, because they feared they would not be believed, understood, or because it would not make any difference to how their debt was handled. Our findings show these fears are not unfounded – of those who did disclose their mental health problems:
· 83% were still harassed by creditors
· 79% felt their mental health problems were not taken into account when a decision was made about their financial difficulties
· 74% felt they were treated unsympathetically and insensitively by staff
"The worry of the debts and not being able to pay bills just makes everything seem worse and you feel as if things will never change and you will never be able to pay or catch up with arrears. When you receive threatening letters for possession or to be taken to court or even with bailiffs, it makes everything bleaker. And suicide becomes more inviting the more the letters arrive."
Relevant recommendations from Mind’s ‘In the red’ report (2008)
Better regulation of doorstep lenders and private finance companies
Mind calls on the Office of Fair Trading (OFT), under the new provisions of the Consumer Credit Act 2006, to set out a rigorous process for gathering information on lenders’ compliance with legislation and guidance and to take steps to ensure companies address any poor practice. At the moment identification of poor practice is over-reliant on consumer complaints.
In addition, the OFT licensing conditions should require lenders to show evidence of mental health awareness training.