Mental health/learning disabilities - out of control spending
RickyZalman
Forumite 4 Posts
I write on behalf of my mother, who is severely dyslexic and has suffered with poor mental health for the majority of her life. I am attempting to get her finances in order. The only income she receives is Employment and Support Allowance (ESA) fortnightly and has outstanding debts <£5,000 to various credit cards, store accounts etc.
Can anyone advise me if there is a national database (or similar) where her name and address can be blocked from acquiring credit products, such as cards and store loans? She has been able to get new credit products in her name, despite having a CCJ against her. Are the credit lenders liable under any circumstances? Thanks in advance for your advice and guidance!
Can anyone advise me if there is a national database (or similar) where her name and address can be blocked from acquiring credit products, such as cards and store loans? She has been able to get new credit products in her name, despite having a CCJ against her. Are the credit lenders liable under any circumstances? Thanks in advance for your advice and guidance!
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If the information that the lender holds clearly shows that your mother could not afford to repay the credit that they gave her, she can complain to the lender, and then to the Financial Ombudsman.
Unfortanately, you it is unlikely that it will be clear cut. You mother has some income, and may have been able to afford to borrow something. If she has not been honest with them about other borrowing she has, you will find it harder to complain unless this borrowing appeared on her credit report, or her mental health was clearly not up to agreeing to the lending.
If someone lacks capacity to manage their finances an appointee can act on their behalf to manage their benefits. This can be done through DWP https://www.gov.uk/become-appointee-for-someone-claiming-benefits
If they lack capacity to manage other finances then they can have a deputy appointed through the Court of Protection. This is not free to arrange so, in my experience, it tends to be the local authority who apply and take on this role https://www.gov.uk/become-deputy
You haven't mentioned whether your mother is open to mental health services or receives any support through adult social care. If so, you might consider bringing this up with them.
In a professional capacity, I have liaised with banks and catalogues to prevent further credit being taken out and to have debts cancelled when people I worked with had debts and these were taken out when it was likely they lacked capacity. I just had to send them evidence of this.. Even when they haven't lacked capacity, I've managed to speak to catalogues with the person present and get them to stop further credit being taken out because of severe mental illness and vulnerability.
If they have capacity, a third party mandate can be arranged with their bank (each bank usually has their own form). This means the person agrees another person can carry out every day banking actions such as paying bills, checking bank statements and decreasing card limits. If your mother thinks this might be helpful, it's an option for her to get some help to keep track of spending and make sure important payments are made. Ordinary power of attorney is similar but applies to all of their banks. Both of these are only an option if they have capacity to make decisions about their finances and to understand what agreeing to this entails.
If your mother has fluctuating capacity (e.g. bipolar disorder, when a person may have capacity between episodes but not during a manic episode), Lasting Power of Attorney is an option. As @tacpot12 said, the person can only arrange this when a person has capacity. It cannot be arranged when they lack capacity.
It's a difficult situation for you to be in, do you receive any support for yourself as a carer?
Current mortgage: £169,237 (01/23)
Goal: £145,000 by 02/2025
End goal: Mortgage free asap!
Mental illness in and of itself doesn’t automatically mean someone lacks capacity around her finances and financial institutions cannot make that presumption without being discriminatory.
Affordability checks are a different issue - is your mother being honest about her income on the application forms?
Have you discussed this with your mother, and what is her take on the issue?
I lost count of the number of times we bailed her out, we have blacklists for gambling so why not for debt?
The only way I know to blacklst her is for her to wreck her credit record.
If she has no assets then she could borrow so much that she can never pay it off (up to say £25k) do cash withdrawals to keep a nest egg of cash or gamble it away. Then pay nothing and get a DRO, it is of course totally irresponsible, but to me it is the banks/credit cards who are being irresponsible by lending to someone on such a low income.
In a year she will be in same position, never likely to pay it off and it will get wiped. It is like a mini bankruptcy so they are not allowed to chase the debts again.
Alternatively get her to stop paying the money she owes, (again assuming she has no assets), a default will be registered and the debt will be sold, she must then never engage, pay or acknowledge the debt, change her phone number and wait 6 years for it to go off statute.
Considering she has a mental health condition she could write to all the CCard companies saying she has a condition and they should never lend to her or if they do then they agree it will not be repaid.