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Debts: Mentally Ill

Volume 476: debated on Monday 2 June 2008

To ask the Secretary of State for Business, Enterprise and Regulatory Reform whether the Ministerial Group on Over-indebtedness (a) has undertaken and (b) plans to undertake work on people with mental health problems who face financial difficulties; and if he will make a statement. (207356)

The Ministerial Group on Over-indebtedness was pleased to note in its “Tackling Over-indebtedness Annual Report 2007” that:

(i) the Money Advice Liaison Group had agreed its best practice guidelines on debt management in relation to people with mental health problems and

(ii) the Finance and Leasing Association had introduced specific provisions in its Lending Code to ensure customers with long term health difficulties received appropriate assistance.

Since then, the British Bankers’ Association have issued their new Banking Code that promises to consider all cases of financial difficulty sympathetically and positively.

The Government expect industry to observe these provisions.

In addition, reforms to the consumer credit licensing regime, introduced by the Consumer Credit Act 2006, have given the Office of Fair Trading stronger powers to investigate and take action against rogue traders who lend irresponsibly.

Furthermore, the Consumer Protection from Unfair Trading Regulations 2008, which come into force on 26 May, provide additional protection for vulnerable consumers. Under these regulations, a commercial practice, such as aggressive or misleading sales techniques, may be found unlawful where it is likely to only adversely affect a clearly identifiable group of vulnerable consumers in a way which a trader can reasonably foresee, by virtue of mental or physical infirmity, age or credulity.