‘recovery’:helping creditors to work better

with indebted customers who have mental health problems

Chris Fitch, Ryan Davey and Jim Fearnley

College Research Unit, Royal College of Psychiatrists

Money Advice Trust

1. debt is common

3. creditors want to address this issue

2. a relationship exists between financial difficulty and mental health

recovery:18 month projectFriends Provident Foundation

aims:improve practice of front-line creditor staff

methodology: national surveyfield-evaluation of DMHEF

outcomes:creditor sector recommendationstailored report

endorsement: major trade bodies

www.rcpsych.ac.uk/debt

evidence

1st November 2009

tools

second edition 2009

resources

first edition 2006

second edition 2009

creditors face significant challenges

contactcustomers may become anxious when contacted - some may disengage, ignoring calls or letters

communicationstaff may have difficulty communicating with customers

or understanding how their mental health problems are relevant

consumer reports16%* treated sympathetically and sensitively

28%** asked how mental health affected debt

* 47/291 participants that disclosed (≥2 consec pay; 31% overall sample)** 79/291 participants that disclosed

contactcustomers may become anxious when contacted - some may disengage, ignoring calls or letters

communicationstaff may have difficulty communicating with customers

or understanding how their mental health problems are relevant

consumer reports85%* - mental health made financial difficulties worse

91%** - financial difficulties made mental health worse

* 788/924 participants (≥2 consec pay)** 840/924 participants (≥2 consec pay)

contactcustomers may become anxious when contacted - some may disengage, ignoring calls or letters

communicationstaff may have difficulty communicating with customers

or understanding how their mental health problems are relevant

consumer reports

“I am not on top of bills etc - and then forget to make payments and deal effectively with issues. I do a very good ostrich impression and bury my head in the sand.”

disclosure customers may have difficulties or fears in relation to talking about their mental health to staff.

This includes its impact on their ability to manage their finances – this reluctance can mask underlying problems which staff need to know about

consumer reports

27%* worried future credit

57%** don’t like disclosing

63%*** wouldn’t understand

59%**** no difference

47%***** wouldn’t believe

67% didn’t tell creditor about their mental health problem* 253/294; ** 298/924; *** 584/924**** 546/924; ***** 438/924

resourcesit can take longer to establish what needs to be done

can’t pay or won’t pay?difficult to distinguish between those with mental health problems, and those perceived as using mental health as an ‘excuse’

evidenceobtaining relevant and clear evidence about a customer’s mental health can be challenging

personal informationcollection and storage of sensitive personal information about mental health may raise important questions for organisations

consumer reports

15%* asked for consent to record details of MH

4%** clearly told how information would be used

59%*** explain situation to several people in same organ.

31% disclosed MH to creditor (291/924)* 42/282 participants (≥2 consec pay)** 11/282 participants (≥2 consec pay)*** 166/281participants (≥2 consec pay)

decision-makingusing information to make decisions about what to do in relation to an account or treatment of a debt is not always easy

consumer reports

10%* built into decisions

31% disclosed MH to creditor (291/924) * 29/281 participants (≥2 consec pay)

not first effort to address this

but is first survey and reviewof frontline practice

quantitative surveysThe programme uses a combination of rapid survey and interview research techniques.

qualitative interviewsThese provide representative and rich data, whilst minimising the amount of time staff are required to engage with the research team.

policy and frontlineInvolving research with policy and operational (including customer-facing) staff

processthe programme focuses on the process through which debts are recovered – from collections and recoveries through to litigation.

challengesidentify the challenges that staff encounter when working with customers who report mental health problems that are affecting their ability to manage or repay their debts.

commercially realisticlocating these challenges within the wider commercial realities

economic solution identify solutions that meet these challenges effectively and economically.

healthhelp companies minimise any distress or ill-health that many customers may experience at an already difficult time.

recommendations will focus on how staff can work more constructively and effectively with customers with mental health problems, rather than on issues around commercial decision-making.

industry-wide outputspractical recommendations for the credit industry in general, in consultation with trade associations.

tailored feedbackeach creditor organisation and debt collection agency participating in the programme will receive a confidential, tailored report with step-by-step recommendations on improving practice.

how you can help?

creditors: accept our invitation to participate

other stakeholders:carefully consider opportunities and

constraints for front-line creditor staff

rdavey@cru.rcpsych.ac.uk020 7977 6649

www.rcpsych.ac.uk/recovery