Manic spending, during a high or period of mania, is one of the six triggers for increased spending identified in the Money and Mental Health Policy Institute’s latest report, In Control: A consultation on regulating spending during periods of poor mental health, published last week. I have been contacted by a reader who has suffered from bipolar disorder for many years – this is Miss D’s story.
I was diagnosed with bipolar about ten years ago. My last serious episode was around three years ago. I have a good job and a joint mortgage with my sister. I had quite a lot of debt, but it was all under control.
In early April this year I went through a major manic episode, spending a fortune online, mostly gambling or buying clothes. During this time I applied for multiple loans and my debts went up from 20k to 40k in a period of two weeks.
As soon as the episode ended I realised I couldn’t afford the repayments.
Contacting the lenders
One of the first lenders I contacted was 118 Money. I had had a small loan from them before, which in the middle of this episode I settled early, using money borrowed from another lender. (Of course none of this makes any sense, but it did to me at the time!) Then just 2 days later I asked to borrow £2000 – and they told me I could have more, so I borrowed £3,500. Another 4 days and I was contacting them to say I couldn’t make the repayments.
118 Money set up a repayment plan as per my income and expenditure form and asked me to get a Debt and Mental Health Evidence Form (DMHEF) completed. My doctor did this – it states I have bipolar and depression and have had for over 6 years. It also confirms that I was going through an episode at the time of taking the loan out and states I am vulnerable at present and worried about debt and need all the support and help possible to get mentally stable.
I sent 118 Money this and asked for the interest on the loan to be removed. They refused and it went through to the complaints department. They said as I had paid on time previously and had no difficulties they had no reason to question the loan and I also met the criteria to lend. I don’t know why they bothered to ask for a DMHEF form!
I then complained to the Financial Ombudsman in early June. I wasn’t feeling very confident but they looked at the case quickly and on the 5th July my adjudicator issued a decision:
“Having been provided with medical evidence that shows Miss D’s most recent manic episode was in April 2016 when she applied for the loan, I believe this demonstrates she wasn’t capable of making clear decisions about her finances at that time.
As stated above, I’m satisfied the loan was affordable to Miss D, based on the information available to 118118money at the time. However, the business has since learned that at the time she applied for the loan she was a vulnerable customer and should be treated accordingly.
I would ask that 118118money waive the interest applicable to the loan and refund any interest Miss D has already paid.”
118 Money accepted this decision and have now removed interest totally £3,097.
I have contacted other creditors that I borrowed from at the time and I am attempting to get the interest removed from these loans as well as I feel it is too easy for companies to take advantage. The Debt Camel page about payday refunds has helped me massively. Lending Stream have already waived the balance that remained from the £1000 loan I took out. I have two claims with Wonga and Quick Quid currently. I also have outstanding loans with Satsuma, TM Advances, Avant, Aqua, Capital One, Nationwide and a Santander overdraft.
Consequences for my future
I am in a well paid job so I am lucky that I have available funds to make a satisfactory contribution towards my debt however having to pay such a large chunk of my wages every month to creditors is obviously not a nice feeling.
To think that all of this has been caused because of one episode is quite shocking and I do not think that mental health is taken seriously enough when it comes to debt. I wish I had never been approved for credit with anyone and I am now in an incredibly difficult situation that is going to have serious consequences for a very long time. My credit report shows approximately 50 settled accounts all made up from pay day loans, loans and credit cards. I currently have 12 open accounts with late payments and defaults which is going to have an effect on me later in life, for example if I want to remortgage.
I am going to continue to go through phases where I feel awful and blame myself for the amount of debt I am in and believe this will effect my mental health in the next few years. I wish something was in place to protect people that have mental health problems and I am sure other people in my position feel the same.
The In Control report looks at exactly this issue – what can be put in place to help consumers with mental health problems better control their own behaviour. It looks at possible policy solutions which can be put in place during a period of good mental health by the individual (possibly with the support of a carer or trusted friend) that can prevent or reduce the impact of poor financial decisions during a later episode of poor mental health.
There aren’t any easy solutions here. As the report says:
“A key consideration will be how “sticky” this framework is. There must be some barriers to the easy removal of restrictions a person has put on themselves, but if nudges are too permanent they could unduly limit an individual’s freedoms.”
But Miss D’s case illustrates how important it is to find an acceptable compromise, that will be workable for the customers, lenders and retailers.