UK regulators are warning they will take “robust action” against firms that are putting consumers’ mental health at risk by using threatening tones and inundating already-vulnerable borrowers with letters, calls and emails, about their debts. Watchdogs have published a joint letter, calling on companies to improve their debt collection practices, after identifying shortcomings across the financial services industry, as well the communications, water and energy sectors. They said that in some cases consumers in financial difficulty felt they were being inundated by debt collection communications; that debt collectors were using intimidating or threatening tones in those communications; and that firms were making it hard for debt advisers to contact them on behalf of clients. The letter, signed by the City watchdog, the Financial Conduct Authority, the energy regulator Ofgem, the water regulator Ofwat and the communications watchdog Ofcom, said that kind of poor behaviour risked affecting customers’ mental and physical health, or leading them to make decisions not in their best interests. Consumers are under strain amid the cost of living crisis. Although energy bills and some other prices have fallen from their peak, housing costs – including rents and mortgages – are much higher than two years ago, before post-pandemic inflation and Russia’s invasion of Ukraine put pressure on bills. Headline inflation in the UK is 4% after having fallen in recent month but still indicates that prices are rising and is double the Bank of England’s 2% target. “Customers subject to collections activity are highly likely to be in vulnerable circumstances due to financial difficulty – and may also have other, non-financial characteristics of vulnerability such as problems with their physical or mental health,” the regulators said. “Firms should be aware that customers in vulnerable circumstances may find it difficult to engage with creditors, and that their vulnerabilities may be exacerbated if creditors take an inappropriate approach to collections.” The watchdogs said they were prepared to use their powers – which can extend to fines – if companies failed to meet expectations. “Where we find firms are falling short and delivering poor outcomes leading to consumer harm, we may take robust action,” the letter added. Their warning comes during debt awareness week, which is meant to highlight the support that is available to struggling borrowers. A survey for campaign group Debt Justice found that a record 6.7 million people in Britain are in financial difficulty, and 13% of adults have missed three or more credit or bill payments in the last six months. That figure rose to 29% among 18- to 24-year-olds and a quarter of 25- to 34-year-olds. Crosslight Advice, a charity providing debt and money advice in London and the south-east of England, said inquiries were up by a fifth in the first two months of 2024 compared with the same period last year, reflecting a growing need from those struggling to make ends meet.