“It’s no exaggeration to say that this change could save lives,” said Martin.
“Over 100,000 people in England try to kill themselves every year because of debt, and four times that. We are therefore delighted that the government has agreed to support this element of our campaign and change the default application rules. ”
Victory surrounds the threatening language and outdated advice in letters sent to those in difficulty.
The rules of the Consumer Credit Act (1974) require lenders to send intimidating letters to people who are seriously behind on debt payments.
These letters should include large blocks of threatening and confusing language, written in all caps – they should also include outdated advice, asking people to consult their lawyer or the local business standards board, instead of pointing out things like advice. free on debt.
The Money and Mental Health Policy Institute founded by Martin therefore launched a campaign to change the law.
The government will now legislate to change the language and presentation of information in debt letters, removing legal jargon and replacing it with more widely understood language and directing people to free sources of debt advice. .
Bold or underlined text will be used in place of capital letters, to make the letters less threatening in their appearance.
Changes will be made to letters regarding regulated consumer credit agreements – such as credit cards, personal loans, overdrafts and auto financing.
“Today’s changes will make even the most painful debt letters much less intimidating and, crucially, will also easily and calmly steer people in serious debt to get the free, non-profit advice they need,” he said. said Martin.
The new rules are expected to come into force in December 2020.
All lenders will then have to make the changes within six months.
Eric Leenders, Managing Director of Personal Finance at UK Finance, said: “The banking and finance industry understands the impact debt can have on a client’s well-being and works closely with government to help them. customers, especially those who are vulnerable.
“Lenders must send notices of default and these important changes announced today will ensure customers receive more appropriate and favorable communications. ”
John Glen, Economic Secretary to the Treasury, said: “Being late on your credit repayments can be a really painful experience that is compounded by a confusing and intimidating letter from your lender.
“As part of our efforts to help those struggling with their finances, it is only right that we take another look at the legislation surrounding these letters.
“These new rules will help eliminate fear of finances by ensuring that letters are easier to understand, less threatening, and allow people to take control of their finances.
“Some vital work has been done by charities, industry and the Money and Mental Health Policy Institute and I am grateful for their support in solving this important issue. “