As well as credit checks, should more companies be running mental health checks?

Affordability is a key issue when it comes to any transactions or financial contracts. Whilst an applicant may be sound on paper, there are no personal or medical references needed, but why is that important?

Whilst a thorough mental health check may not always be necessary, there certainly should be red flags to companies to make sure that the welfare of the customer is considered throughout the contract or transaction. It may not seem important - after all, if you have a good credit history, a credit company will only be interested in knowing whether or not you will repay the loan within the agreed terms. But, it’s not as black and white as that.

According to research by the advice charity Money and Mental Health Policy Institute, 91% of those with mental health conditions would spend more money during a period of poor mental health. If people with known mental health conditions are linked to this kind of behaviour, that is when more companies need to sit up and pay attention.

This was a harsh reality for one family recently reported in the Times. Toby Grayson, who suffered from bipolar disorder, opened three different mobile phone accounts with O2 in 2019, but then defaulted on all the payments. By the time his mum, Jayne, intervened, Toby owed upwards of £300 - although the amount could have been considerably more, as Jayne received a number of threatening letters simply stating the amount was overdue, without saying by how much.

Luckily, Jayne wanted to try and right the situation by paying her son’s bills and cancelling the contract - however, she found there were various hurdles along the way, from looped telephone helplines to asking for missing information.

The question is, why was this allowed to happen in the first place? Surely the fact that Toby had opened three accounts within one year should have been a huge red flag to O2 and perhaps at that point further checks should have been put in place.

After all, most other contracts in law are all about sound mind. You cannot sign anything, wills, contracts etc., without proving that the individual has capability and is mental able to understand what they are signing. In the case of a will, a doctor can also be asked to witness the document

Of course, O2 will say it is their job to sell phones and not act as social carers, but, there is definitely a grey area here. An O2 spokesman did state that, in line with GDPR, “in order to discuss a customer’s account with a third party such as a family member who is not linked to the account, we would require permission from the account holder.”

Therefore, if you are in a position where you live with a vulnerable individual, and all parties aware of any behavior associated with any mental illness such as bipolar, it is so important that you keep the communications channel open. For example, could you ask a loved one’s permission to be a signatory on an account, or be named on any contracts or statements? At least then you would be able to step in if required, or act on their behalf.

As always, take advice, plan ahead and help and support each other when needed and if you would like any legal advice, contact the Private Client team at Downs Solicitors to see how we can help.