ieExplains: What does the Central Bank of Ireland’s new Consumer Protection Code do? 

Revised code imposes statutory obligations on regulated financial service providers to put customer interests at the heart of how they design, sell and explain financial products and services

The Central Bank of Ireland's new Consumer Protection Code makes changes across a number of areas —including mortgages, insurance, borrowing and investing.

On Tuesday, the Central Bank of Ireland’s new Consumer Protection Code came into force after first being announced in March of last year. The revised code makes changes across a number of areas — including mortgages, insurance, borrowing and investing — with a particular focus on making things easier on customers.

The code imposes statutory obligations on regulated financial service providers to put customer interests at the heart of how they design, sell and explain financial products and services and how they support customers to make confident financial decisions.

What impact does the new code have on mortgages?

Following these changes, mortgage providers will have to comply with a number of new requirements that will make switching easier.

Mortgage providers will now have to show a customer how much money they could save by switching to a cheaper mortgage. A customer's current lender must also send reminders about cheaper rate options.

The new rules will also require lenders to provide title deeds to a mortgage borrower within 10 working days to help make switching mortgages easier. Previously, delays in releasing title deeds could impact the mortgage switching process.

What does the code change when it comes to insurance?

The code now ensures insurance companies cannot auto-renew policies on gadget, dental, pet, and travel insurance without the customer's explicit consent. This will help avoid customers continually paying insurance premiums for something that may no longer be needed.

How does the revised code make things easier for the customer?

Financial forms must design products and services that meet a customer's needs. They must communicate clearly and help customers make decisions that are right for them. Firms also must give information in plain language that a customer can understand, without unnecessary jargon or technical terms. Information must be clear, accurate, and up to date.

Financial firms are now required to make their apps and websites easy to use, and if a customer is going through difficult times — such as illness, bereavement, or job loss — firms must provide extra support.

When it comes to issues customers may have, firms must make it simple for customers to complain and must resolve issues quickly. There are also new requirements for firms to counter the risk of frauds and scams, keep customers informed and supported if they fall victim to one.

Customers can now also nominate a trusted contact person who the firm can contact if needed.

What is a trusted contact person?

Under this new rule, 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, or where a firm suspects financial abuse including fraud.

However, this person cannot make changes to policies without the consent of the consumer.

What changes are being implemented when it comes to investing?

In changes to rules around investing, firms will be required to ensure they communicate clearly on climate and sustainability features of products, and they must ensure their advertising does not mislead customers on a product’s or service’s sustainability to avoid the risk of “greenwashing”.