What should banks do to protect me?
There is guidance on how banks should act. These guidelines are not the law. But many banks, lenders and debt collection agencies have agreed to follow them.
Mental capacity guidance
The Financial Conduct Authority (FCA) has guidance to lenders. It covers looking for signs of capacity problems and setting up procedures to make sure customers make informed decisions and lending decisions made to vulnerable are informed and responsible.
https://www.handbook.fca.org.uk/handbook/CONC/2/10.html
Mental health and debt guidance
The Money Advice Liaison Group (MALG) has written guidance called Good Practice Awareness Guidelines for Consumers with Mental Health Problems and Debt.
http://malg.org.uk/wp-content/uploads/2017/03/MALG-Debt-and-Mental-Health-Guidelines-2015.pdf
The guidance says that lenders should:
- Make sure people with mental illness are treated fairly,
- Work with health care professionals and money advisers,
- Only take court action as a last resort, and
- Consider writing off a debt if the person that owes it is unable to pay because of their illness.
If the lender hasn’t followed the code, this is also grounds for complaint.
If your lender is a member of a trade association, they may have their own code of practice. You can usually find on the trade association’s website. If the lender hasn’t followed the code, this is also grounds for complaint.
