Debt, Recovery And Mental Health - Shergroup Takes The Lead In A New Approach To Dealing With The Problems Associated With Debtors Who Have Mental Health Issues

The recent publication by the Royal College of Psychiatrists (RCPsych) and the Money Advice Trust (MAT) of the results of their research into the issues of debt and mental health has placed this subject firmly on the enforcement agenda.

Shergroup has pledged to take the lead in the field of civil enforcement and mental health, and has approached the Royal College of Psychiatrists with a view to further investigating how these issues translate across to the arena of civil enforcement and ensuring that their officers are best prepared to deal with the issues thrown up by debtors with mental health problems as and when they are encountered, whether it be over the telephone or on the doorstep.

Shergroup has also offered help to the RCPsych in developing training specifically aimed at front line enforcement officers who may find themselves dealing with debtors who have clear mental health issues. By taking the lead in this way, Shergroup wish to act as exemplars to the civil enforcement industry as a whole with regard to how the issue of debtors with mental health problems should be approached across the entire sector.

The research conducted by the RCPsych and MAT threw up some startling facts about issues of mental health and debt. It was calculated that every 30 seconds across the UK, staff working in collections will have to make a decision as to how best to recover a debt from a customer who says they have a mental health issue. What this means for the average collections team in terms of how many such customers they will have to deal with is this - the rule of thumb is that every member of your collections team, whether office based or field based, will come into contact with 5 debtors with a mental health problem each and every month.

It is often the case that it will be a member of the telephone collections team or even an enforcement officer on the doorstep with a writ or warrant in their hand who is the first person confronted with the reality of the debtor's situation - that the debtor is suffering from genuine mental health issues. It is unfortunately the case in all too many instances that debtors with mental health issues do not properly engage with the collections process or the court recovery process, and their mental health problems may not become apparent until an officer actually turns up at their premises.

How that person handles the situation may be crucial not only to the successful collection of the debt but to the long term mental health of the debtor.

Other figures thrown up by this research were equally fascinating:
  • 13% of the population has a genuine diagnosable mental health issue. 9% suffer from clinical depression or anxiety, whilst 4% suffer from other diagnosable mental disorders. (This does not include everyday or work-related stress or problems associated with drug, alcohol or gambling problems.) Some of these may also be taking medication which may have side effects.
  • 25% of those with a diagnosed mental health disorder are in debt (compared with an estimated 8% of the general population).
  • 40% of those in serious debt admit to suffering from anxiety or depression (as opposed to 9% of the general population who have clinically diagnosed anxiety or depression).
  • 40% of people with clinically diagnosed mental health disorders will be living below what DWP regards as 'the poverty line'.
It is not all bad news, however - it is clear from the research that identifying such debtors at an early stage and giving them help in dealing with their debt problems can also have a beneficial effect on their mental health too. In 90% of cases where debtors were suffering from both debt problems and mental health issues, clearing their debts also had a beneficial effect on that person's mental health.

The research showed that there was still much to be done to make dealing with mental health an issue that is taken seriously within debt collection circles - but equally it is an issue that staff want to be able to deal with better, not only for the sake of the person concerned but because they can see a business rationale for doing so.

The research showed that:
  • 59% of collection staff felt that if they were in a position to take the mental health issues the debtor was suffering from into account, they would be in a better position to collect the debt owed as they would be in full possession of the facts of the case and could respond accordingly.
  • 69% of collection staff felt, however, that training in this area was lacking within their organisation.
  • 50% felt that this lack of training impaired their ability to do their job properly.
  • 70% said they would welcome more training on this issue.
  • Collection staff said that on the whole they found the idea of dealing with a customer who had mental health issues more potentially troubling than any other client group.
The economic rationale for ensuring staff are better placed to deal with the issues raised by debtors who have mental health issues is actually very simple.

If creditors, collection staff and enforcement officers:
  • do not know customers have mental health issues;
  • do not encourage customers to tell them this;
  • do not ask basic questions about the impact this has on their ability to pay.
They will be missing:
  • a vital piece of information;
  • an opportunity to impress upon debtors that this can be taken into account;
  • an opportunity to impress upon debtors that they can clear their debts;
  • an opportunity to identify, anticipate and manage related challenges;
  • an opportunity to refer the debtor to specialist staff.
This could result in:
  • a broken payment arrangement;
  • additional costs, penalty charges, further arrears and further legal action;
  • a possible worsening of the debtor's mental health;
  • reduced likelihood of successful engagement with the creditor;
  • less chance of addressing their financial problems.
In conjunction with the Money Advice Liaison Group, RCPsych have also developed Debt and Mental Health Evidence Forms that enable the necessary relevant evidence about the debtor to be collated and endorsed by the debtor's doctor or a mental health professional. Getting such forms completed will put those working in enforcement far more in the picture as to the reality of the situation they are dealing with, whilst the added security of knowing that it has been backed up by a medical professional will encourage the officer to adopt a more conciliatory approach, knowing that their position is secure and safe from criticism if they have withdrawn without enforcing the writ or warrant on medically endorsed advice.

Claire Sandbrook, Shergroup CEO, said:

'The beauty of working in partnership with RCPsych on such an important issue is that you are dealing with a professional body that approaches everything from a factual, practical and scientific basis. There is no baggage, no pre-conceived ideas about the collections or enforcement industries - just a will to do what is best for those who have a genuine, clinically diagnosed mental health issue, and to ensure that those who may come into contact with them in the course of their working lives are best prepared to deal with any challenges they may face in dealing with such people.

It is for this reason that Shergroup is proud to have started this dialogue with RCPsych and would stress the need for them to be involved in any future discussions on what constitutes 'vulnerability' when decisions as to the definition of a 'vulnerable debtor' are had between those with an interest in the enforcement industry and MoJ.'

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