PROPOSED new guidelines to strengthen protection for consumers when dealing with financial institutions were unveiled by the Central Bank yesterday.
The Consumer Protection Code consultation paper outlines proposed new requirements and the strengthening of existing safeguards for customers dealing with firms monitored by the Central Bank.
Key recommendations include the drawing up of a definition of a vulnerable customer, more rigorous suitability requirements and the imposition of strict time limits in dealing with overcharging errors.
The paper defines a vulnerable consumer as one “that is vulnerable because of mental or physical infirmity, age, circumstances or credulity.”
The definition provides an indicative list of circumstances that could render a consumer vulnerable.
The inclusion of this definition in the code would mean that regulated entities would have to consider whether a consumer has any of the characteristics of a vulnerable consumer when making an assessment of the suitability of them for a financial product or service.
The Central Bank’s consumer protection assistant director general Bernard Sheridan said: “Consumer protection remains a high priority area for the Central Bank and this review of the code is the most significant strengthening of consumer protection requirements for financial firms since the code was first introduced three years ago. The new rules and stricter requirements for firms in how they deal with consumers will enhance the level of protection for consumers in their dealings with regulated financial services firms.”
The paper also includes a system for building capacity to monitor product developments in the financial services industry including a proposal that product producers must, when designing new investment products, identify the target market for which the product is likely to be suitable.
The Central Bank is seeking views on the proposals by January 10, 2011, with a view to publishing the revised code in mid-2011.
All submissions received will be published on www.centralbank.ie.
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