Sections of new consumer code may prove difficult to implement
Chief executive of the Compliance Institute Michael Kavanagh: Ability to nominate a trusted contact person 'invaluable'.
A survey of compliance professionals has found a significant proportion believe the new Central Bank of Ireland trusted “trusted contact person” rule, designed to help vulnerable people, will be the most beneficial change to consumers, but could prove difficult to implement.
From March 24, the Central Bank’s revised consumer protection code will come into effect, implementing a number of changes, including in areas of digital technology implementation, mortgage switching, insurance cover, and “greenwashing”.
It also brings in a new rule called “trusted contact person”. A consumer will now be able to appoint a "trusted contact person" to act as a point of contact should there be any difficulties in communicating with the consumer.
This person cannot make changes to policies without the consent of the consumer.
In advance of the rules coming into effect, the Compliance Institute surveyed 150 compliance professionals, of which 42% said this “trusted contact person” would be the most beneficial change to consumers. However, 43% said it will also be the hardest to implement.
Chief executive of the Compliance Institute Michael Kavanagh said the ability to nominate a “trusted contact person” would not just prove “invaluable” when customers in “vulnerable circumstances find it difficult to manage their finances or communicate with their bank”, it will also be “hugely helpful where financial abuse or fraud is suspected”.
When it comes to mortgage switching, lenders will be required to provide customers with a personalised saving estimate in euros, alongside each alternative mortgage refinancing option, as well as provide a specific reminder of the mortgage refinancing options between four and eight weeks from when originally notified.
The new rules also require lenders to provide title deeds to a mortgage borrower within 10 working days to help make switching mortgages easier.
Mr Kavanagh said the time currently taken by some lenders to release title deeds to mortgage switchers could lead to “unnecessary delays, so this new rule should help speed up the mortgage switching process”.
The survey found 23% of compliance professionals said this change would be the hardest to implement.
The revised code states that when firms use digital technology, it must be designed and implemented with a customer focus and not designed in a way that seeks to unfairly exploit or take advantage of behaviours, habits, preferences or biases of customers, which might result in customer detriment.
The new code will also require “opt-in” renewal for dental, pet, gadget and travel insurance, which will require customer explicit consent to continue the policy.
In the areas of sustainability, firms will be required to ensure firms appropriately reflect sustainability in statements of suitability, and firms must ensure their advertising does not mislead customers on a product’s or service’s sustainability to avoid the risk of “greenwashing”.
This anti-greenwashing rule was highlighted by one in four compliance experts as a key consumer safeguard, according to the Compliance Institute, but 25% said this would be the most difficult change to implement.
A further 22% said the end of auto-renewal for certain insurance products would be the most difficult to implement.
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