Government agrees to take action on distressing debt letters

By agency reporter
October 8, 2020

The Money and Mental Health Policy Institute has been campaigning for the government to change rules in the Consumer Credit Act (1974) which dictate the content of debt letters. On 7 October 2020 the government responded by announcing changes to make the most intimidating debt letters more supportive and less threatening.

Money and Mental Health’s research shows that the rules force lenders to send intimidating letters to people who are seriously behind on debt payments.  

By law, these letters have to include large blocks of threatening and confusing language, written in capital letters. They also have to include outdated advice, recommending that people in problem debt consult their solicitor or local trading standards board — instead of signposting to more appropriate support such as free debt advice.

Money and Mental Health’s research also shows that these letters can have a catastrophic impact on people with debt problems. 

It highlights that 100,000 people in problem debt attempt to take their own lives each year in England, and these letters are a key risk factor that can contribute to people becoming suicidal. Receiving them from multiple lenders on a daily basis is leaving people in huge distress and unable to see a solution to their situation. 

The charity’s Stop the Debt Threats campaign has been calling on the government to urgently address this issue. The government has responded by announcing important changes that will make default notices — the distressing letters people receive when they are seriously behind on payments — more supportive and less intimidating for people in problem debt. Specific changes include:

  • Letters will now use more accessible and less threatening language
  • Complex or jargon terms will be explained in plain English
  • Letters will no longer contain angry-looking content in upper case letters
  • Firms will be mandated to include signposting to sources of free debt advice.


In the coming year, Money and Mental Health will continue to push the government for further reforms to the Consumer Credit Act, to put an end to all types of distressing debt letters.

Martin Lewis, Founder and Chair of the Money and Mental Health Policy Institute charity, said: “It’s no exaggeration to say that this change could save lives. Over 100,000 in England attempt to take their lives each year due to debts, and four times that consider it. So we’re delighted the government has agreed to back this element of our campaign and change the default demand rules. The last thing people struggling with debt need is a bunch of thuggish letters dropping through the letterbox, in language they can’t understand, written in shouty capitals alongside threats of court action.

“And the timing is crucial, with millions of people facing debt and distress due to the pandemic, the sooner we end these out-of-date laws which force lenders to send intimidating letters the better. Today’s changes will make the most distressing debt letters much less intimidating, and crucially will also easily and calmly point people in serious debt to get the free, non-profit, debt advice they need.”

John Glen, Economic Secretary to the Treasury, said: “Being behind on your credit repayments can be a really distressing experience which is made worse by a confusing and intimidating letter from your lender. As part of our effort to help people struggling with their finances, it’s right that we look again at the legislation around these letters. 

“These new rules will help to take the fear out of finance by ensuring that letters are easier to understand, less threatening, and empower people to take control of their finances. Some vital work has been done by charities, the industry and MMHPI and I am grateful for their support in tackling this important issue.”

* Call the Samaritans free on 116 123

* Money and Mental Health research here

* Money and Mental Health Policy Institute https://www.moneyandmentalhealth.org/


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