Stricter customer procedure rules imposed on banks

A STRICTER set of rules have been slapped on the country’s banks when it comes to mortgage lending and dealing with customers in arrears.

The Central Bank’s new rules now include more stringent requirements for mortgage affordability testing and a ban on unsolicited personal or “doorstep” visits.

New rules have also been set out on dealing with consumers who are in arrears on credit card bills, personal loans and buy-to-let mortgages.

The revised Consumer Protection Code, which will come into effect at the start of next year, introduces protections for smaller loans similar to those for mortgage arrears which are already covered by the Code of Conduct on Mortgage Arrears.

The code also limits the number of unsolicited communications with a consumer in arrears to three in each calendar month.

Regulated entities must consider too if there is any evidence of vulnerability on the part of the consumer, for example, a vision or hearing impairment or a lack of knowledge or financial capability.

They must in this case provide those identified as vulnerable consumers with the necessary arrangements or assistance to facilitate their dealings with the regulated entity.

The bank said the publication of the code represents the most significant strengthening of protections for consumers of financial institutions since the launch of the initial code in 2006.

Director of consumer protection, Bernard Sheridan, said: “Consumer protection is a key priority for the Central Bank and the publication of the revised code is the culmination of a significant review and consultation process to strengthen the existing consumer protection framework.

“A range of significant enhancements have been made to the code in order to address areas of concern and to ensure that consumers are adequately protected in their dealings with financial entities.

“These enhancements include additional protections for vulnerable consumers and stricter rules to prevent borrowers in arrears from being harassed.”

Mr Sheridan said that compliance with the new requirements will require procedural changes to ensure that all their staff are properly trained to understand and implement the code.