Chris Lees, Research Officer, Money and Mental Health.

How banks and retailers can help people stay in control of online spending

2 December 2020

We recently launched our latest report, Convenience at a cost, which looked at people with mental health problems’ experience of online shopping. The report highlighted the importance of online shopping for people with mental health problems, especially when they are most unwell and unable to leave the home or face shopping in person. It also showed that it can be difficult for people with mental health problems to control their spending online and the way that shopping sites are designed can lead to people spending more than they can afford.

Empowering customers

In the report we looked at what retailers could do to better support their customers with mental health problems and help them to manage their spending. To do this we spoke to our Research Community, a group of 5,000 people (as of April 2021) with lived experience of mental health problems. Many respondents were keen for shopping sites to offer tools that they could opt-into to help them stay in control of their spending. This could include the option to set a spending limit that could be set for a given time period, like a weekly or a monthly limit, which could act as an effective block to impulsive spending. 

“Option to set spending limit, even better if this also signposts to a decent budgeting tool so that the limit can be worked out realistically.” Expert by experience

To be effective, any such limit should be accompanied by a cooling off period to prevent immediate changes and resulting harm, such as someone turning off the limit and quickly spending more than they can afford. This could protect people from overspending when unwell and unable to control their impulses.

Financial service providers

While the recommendations in our latest report focus on the online retail sector we do see an important role for banks and other financial services providers to help people with mental health problems control their spending. Banks have a unique overview of customer spending and can use this to spot the signs of spending problems. Several banks have made significant progress in the last few years in developing gambling blocks for their account holders, which use merchant codes to block spending on gambling sites or at betting shops and casinos. Banks should develop similar tools for other categories of spending, including spending on retail sites, to empower customers to limit or completely block spending when required.

“Banks could help by offering transaction limits for those people with mental health issues that want it.” Expert by experience

Banks could also be more proactive when identifying signs of vulnerability, or when a customer discloses a problem, to let customers know about tools they could use to help them manage their spending, including on retail sites.

“Banks could provide their customers with helpful alerts if they notice a sudden increase in online spending.” Expert by experience

How to best help customers with mental health problems

Every year one in four people experience a mental health problem. While not everyone with a mental health problem will struggle to control their spending on shopping sites, a significant proportion of bank customers will. Our report highlighted the wider financial impact online shopping can have. Problems with overspending will often have a knock-on effect, sometimes leading to difficulties keeping up with payments for other essential services, like energy or broadband.

If essential services providers want to meet regulatory guidance on how to treat vulnerable customers fairly, they must ensure they understand the needs of customers with mental health problems and how this can impact their finances, including difficulties with spending control. People with mental health problems are also more likely to find contacting providers when they need support very challenging. Our Mental Health Accessible programme works directly with essential services providers to help them improve their accessibility for customers with mental health problems.