Banks should waiver overdraft charges if a person in a mental health crisis spends “erratically”, a charity has urged.
The call came after a report revealed those diagnosed with a mental illness, and who are usually on benefits, are three times more likely to be in debt than other people, and that owing money is worsening people’s mental health.
A Mind survey of more than 1,800 people with mental health problems and in debt reported that 91 per cent believe their debt had worsened their mental health.
More than half (56%) said they had even gone without food due to crippling debt.
Mind is urging banks to adopt a “flagging” system where service users – particularly those diagnosed with bipolar disorder or schizophrenia who are vulnerable to mania – can choose to have their account monitored for erratic spending.
Banks should also not impose charges on unauthorised debt accrued when in crisis, said the charity.
Mind’s chief executive Paul Farmer said “debt-depression” is a growing problem in the UK.
“Changes in practice such as waiving fees when a customer has been too unwell to manage their finances and introducing mental health awareness training for bank staff will make all the difference,” he said.
“Creditors have a duty to help not hound their customers, especially when they are coping with serious health problems,” he added.
A spokesman from the British Bankers’ Association said: “The banking code sets out a series of commitments to people facing financial difficulties, including being sympathetic and positive in their consideration of financial difficulties and proactively identifying and contacting individuals who may be at risk.”
Another Mind recommendation in its ‘In The Red’ report is that community psychiatric nurses, social workers and GPs should receive training to support people with mental health problems in debt.
In response, a Department of Health spokeswoman told Disability Now magazine: “It is not practical to expect professional staff to know about all the issues and the law covering debt management.
“Apart from the fact that this is not why they came into the service, knowledge of debt management is highly complex and there are various outside experts, who keep up to date with any changes in law and practice, who are better placed and fully qualified to deal with this issue.”
The survey was carried out by researchers from the Royal College of Psychiatrists.
Mind’s survey also found:
• 71 per cent of respondents ran out of money every week or most weeks
• 87 per cent rely on credit to pay for food and everyday costs
• 51 per cent had gone without heating due to debt
• 92 per cent reported not being able to socialise
• Over 50 per cent were living on a weekly household income of less than £200 – what the government defines as ‘living on the poverty line’.