Rogue credentials should be stopped, says Martin Lewis

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The rogue letters that ruin the lives of people with problem debt should be stopped, urged consumer champion Martin Lewis.

The Money and Mental Health Policy Institute, which was founded by Mr Lewis, said outdated laws that require lenders to send such letters should be changed, as part of financial support measures for the coronavirus crisis.

Money and Mental Health’s “End Debt Threats” campaign calls for the rules of the Consumer Credit Act (1974) to be updated to make letters less threatening and painful.

Correspondence addressed to people considered to be in arrears may concern overdrafts, credit and store cards, payday loans or personal loans, for example.

The institute said current rules dictate the content of some letters sent by lenders when people are seriously behind on payments.

Confusing language can be used alongside threats of legal action, he said.

Martin Lewis, president of the Money and Mental Health Policy Institute, said: “The fact that lenders are forced by decades-old law to send bully letters to people with debt problems is staggering. These letters are ruining lives, and many lenders say they don’t want to send them, but the law leaves them with no options.

The government has set up support systems covering part of the population. Yet at such a sensitive and stressful time, he must change the rules on letters of debt.Martin lewis

“In the coming weeks, we will have a perverse situation where lenders will be forced to send threat letters to millions of people, even though they have been allowed to temporarily suspend debt repayment. This will cause distress and confusion at a time when financially struggling people, and many struggling with mental health issues, need it the least.

“The government has put in place support systems covering part of the population. Yet at such a sensitive and stressful time, he must change the rules on credentials. “

A Treasury spokesperson said: “It is vitally important that banks communicate with their customers about debt so that they can be supported in managing their finances. However, we are aware of the concerns raised and are carefully considering the matter.

“The epidemic has affected the lives of many – which is why we have introduced a broad package of financial support that is helping millions of businesses and individuals through these difficult times.”

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