New Rules to Make Debt Letters ‘Less Intimidating and Easier to Understand’

October 7, 2020

New rules backed by the government should soon mean that letters sent by creditors to people in problem debt will be “easier to understand and less intimidating”.

The government has decided to insist on changes in these contexts partly in response to research that highlights how distressing debt letters can often be for people who have been struggling to keep up with demands from their creditors.

Researchers have said that large amounts of capitalised text and lots of legal terms within letters sent by creditors can have the effect of confusing and severely worrying people in problem debt.

Experts have concluded that the effects of debt letters are all too often simply to stress people out and actually make it less likely that they’ll be able to manage their debts effectively.

The Treasury has said it hopes to ensure that creditors improve the way they communicate information about debts and repayment options to their customers in part so that the mental health of people with money problems can be better protected.

Plans are in place for the government to legislate in ways that mean creditors will soon be legally obliged to change and improve the language and layouts they use in letters to their debtors.

The use of capital letters will be discouraged and there will be a need for more emphasis on communicating ideas and financial details in ways that consumers can easily understand and they don’t find unnecessarily confusing.

“It’s no exaggeration to say that this change could save lives,” said Martin Lewis, the founder and chair of the Money and Mental Health Policy Institute charity.

“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.

“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.”

Paul Barber

Head Adviser at our Manchester Office

Tel: 0800 001 4247

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