Consumer Protection Code 2012
2015
2
Chapter
TABLE OF CONTENTS
Page
1
Scope
4
2
General Principles
7
3
General Requirements
9
Restrictions
11
Conflicts of interest
14
Personal visits and contact with consumers
16
Premium handling
18
Product producer responsibilities
19
4
Provision of Information
General requirements
21
Information about regulatory status
22
Information about the regulated entity and its
regulated activities
23
Information about products
24
Information about charges
33
Information about remuneration
33
5
Knowing the Consumer and Suitability
35
6
Post-sale Information Requirements
42
7
Rebates and Claims Processing
48
8
Arrears Handling
53
9
Advertising
57
10
Errors and Complaints Resolution
66
11
Records and Compliance
69
12
13
Definitions
Additional requirements for Debt Management firms
71
78
Appendix A Key Features Document for Trackers
84
Appendix B PRSA Document
87
Appendix C Non-standard PRSA Document
90
3
Appendix D Information to be provided to the consumer [Pursuant to
provision 13.1]
91
Appendix E Standard Financial Statement 94
4
CHAPTER 1
SCOPE
INTRODUCTION
In order to ensure a consistent level of protection for consumers regardless of the
type of financial services provider they choose, the Consumer Protection Code (the
Code) was introduced in August 2006. Following the introduction of legislation
governing the authorisation of retail credit firms and home reversion firms, an
Addendum to the Code was issued in May 2008.
The Consumer Protection Code has been updated and this revised Consumer
Protection Code replaces the original Consumer Protection Code introduced in
August 2006 and is effective from 1 January 2012. Chapter 13 was introduced in
November 2014 and is effective from 1 January 2015.
LEGISLATIVE BASIS
This Code is issued pursuant to powers under the following legislation:
(a) Section 117 of the Central Bank Act 1989;
(b) Section 23 and Section 37 of the Investment Intermediaries Act 1995;
(c) Section 8H of the Consumer Credit Act 1995; and
(d) Section 61 of the Insurance Act 1989.
The Central Bank of Ireland has the power to administer sanctions for a
contravention of this Code, under Part IIIC of the Central Bank Act 1942.
The provisions of this Code are binding on regulated entities and must, at all times,
be complied with when providing financial services.
Any legal proceedings, or any investigation, disciplinary or enforcement action in
respect of any provision of the Consumer Protection Code that applied prior to the
issue of this Code may be continued, and any breach of any provision of the
Consumer Protection Code that applied prior to the issue of this Code may
subsequently be the subject of legal proceedings, investigation, disciplinary or
enforcement action by the Central Bank or other person, as if the provision had not
been amended or deleted and as if the Code had not been updated and re-issued.
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APPLICATION
Subject to the exclusions set out in the following paragraphs this Code applies to the
regulated activities of regulated entities operating in the State, including:
o financial services providers authorised, registered or licensed by the Central
Bank; and
o financial services providers authorised, registered or licensed in another EU
or EEA Member State when providing services in this State on a branch or
cross-border basis.
Without prejudice to the generality of the above, the types of firm that the Code
applies to include:
Credit Institutions;
Insurance Undertakings;
Investment Business Firms, authorised under the Investment Intermediaries Act
1995;
Investment Intermediaries, authorised under the Investment Intermediaries Act
1995;
Insurance Intermediaries;
Mortgage Intermediaries;
Payment Institutions;
Electronic Money Institutions;
Credit Unions, when acting as insurance intermediaries;
Regulated entities providing retail credit;
Home Reversion Firms; and
Debt Management firms.
Chapter 2 (General Principles) applies in respect of all customers in the State and the
other chapters of the Code apply in respect of customers in the State who fall within
the definition of consumer (except in the case of provisions which are specifically
restricted to personal consumers - provisions which are specifically restricted to
personal consumers apply only to customers in the State who fall within the
definition of personal consumer).
Where regulated entities are providing credit under credit agreements which fall
within the scope of the European Communities (Consumer Credit Agreements)
Regulations 2010 (S.I. No. 281 of 2010), only the following sections of the Code
apply:
Chapter 2, General Principles 2.1 to 2.4 and 2.7 to 2.12
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Chapter 3, General Requirements
Chapter 4, Provision of Information: Provisions 4.7 to 4.11 and 4.26
Chapter 6, Post-sale Information Requirements: Provision 6.8
Chapter 8, Arrears Handling
Chapter 10, Errors and Complaints Resolution
Chapter 11, Records and Compliance.
Where regulated entities are providing payment services and/or issuing electronic
money, only the following sections of the Code apply:
Chapter 2, General Principles 2.1 to 2.4 and 2.7 to 2.12
Chapter 3, General Requirements: Provisions 3.1, 3.17 to 3.23 and 3.28 to
3.45
Chapter 4, Provision of Information: Provisions 4.7 to 4.11
Chapter 8, Arrears Handling
Chapter 9, Advertising: Provisions 9.1 to 9.18 and 9.30 to 9.31
Chapter 10, Errors and Complaints Resolution
Chapter 11, Records and Compliance: Provisions 11.5 to 11.10
Where regulated entities are providing debt management services, Provision 5.19
of the Code does not apply.
THE CODE DOES NOT APPLY TO:
Services provided by regulated entities to persons outside the State;
MiFID services;
Moneylending under the Consumer Credit Act 1995;
Reinsurance business;
Bureau de change business;
Credit union activities, other than when acting as insurance intermediaries;
The provision of credit involving a total amount of credit of less than €200;
and
Hire purchase and consumer hire agreements.
OTHER MATTERS
All references to the provision of services throughout this Code also include the
provision of advice.
Please refer to the Definitions section for any term shown in bold and italics
throughout the text of the Code.
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CHAPTER 2
GENERAL PRINCIPLES
A regulated entity must ensure that in all its dealings with customers and within the
context of its authorisation it:
2.1 acts honestly, fairly and professionally in the best interests of its customers
and the integrity of the market;
2.2 acts with due skill, care and diligence in the best interests of its customers;
2.3 does not recklessly, negligently or deliberately mislead a customer as to the
real or perceived advantages or disadvantages of any product or service;
2.4 has and employs effectively the resources, policies and procedures, systems
and control checks, including compliance checks, and staff training that are
necessary for compliance with this Code;
2.5 seeks from its customers information relevant to the product or service
requested;
2.6 makes full disclosure of all relevant material information, including all
charges, in a way that seeks to inform the customer;
2.7 seeks to avoid conflicts of interest;
2.8 corrects errors and handles complaints speedily, efficiently and fairly;
CLARIFICATION OF SCOPE
Consumer Credit, Payment Services and Electronic Money
a) Where regulated entities are providing credit under credit agreements which fall
within the scope of the European Communities (Consumer Credit Agreements)
Regulations 2010 (S.I. No. 281 of 2010), only General Principles 2.1 to 2.4 and 2.7 to
2.12 apply.
b) Where regulated entities are providing payment services and/or issuing electronic
money, only General Principles 2.1 to 2.4 and 2.7 to 2.12 apply.
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2.9 does not exert undue pressure or undue influence on a customer;
2.10 ensures that any outsourced activity complies with the requirements of this
Code;
2.11 without prejudice to the pursuit of its legitimate commercial aims, does not,
through its policies, procedures, or working practices, prevent access to basic
financial services; and
2.12 complies with the letter and spirit of this Code.
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CHAPTER 3
GENERAL REQUIREMENTS
3.1 Where a regulated entity has identified that a personal consumer is a
vulnerable consumer, the regulated entity must ensure that the vulnerable
consumer is provided with such reasonable arrangements and/or assistance
that may be necessary to facilitate him or her in his or her dealings with the
regulated entity.
3.2 A regulated entity must ensure that the name of a product or service is not
misleading in terms of the benefits that the product or service can deliver to
a consumer.
3.3 A regulated entity must ensure that all instructions from or on behalf of a
consumer are processed properly and promptly.
3.4 A credit institution must ensure that any funds received by it to be lodged to
a consumer’s term or notice deposit account directly or via a deposit agent,
are credited to that account by close of the business day on which the funds
are received. Where the funds are not credited on the day they are received,
credit for those funds must be backdated to the day the funds were received.
3.5 A regulated entity that is in direct receipt of a payment from or on behalf of a
consumer for a financial product or service must provide that consumer with
a receipt. This receipt must include the following information:
a) the name and address of the regulated entity;
b) the name of the consumer who provided the payment, or on whose
behalf the payment is provided;
c) the value of the payment received and the date on which it was received;
d) the purpose of the payment; and
e) in the case of an insurance intermediary, that the acceptance by the
insurance intermediary of a completed insurance proposal does not
itself constitute the effecting of a policy of insurance, where relevant.
3.6 A regulated entity must ensure that documents conferring ownership rights
are given to the consumer in a timely manner or are held for safekeeping
CLARIFICATION OF SCOPE
Payment Services and Electronic Money
Where regulated entities are providing payment services and/or issuing electronic money,
only Provisions 3.1, 3.17 to 3.23 and 3.28 to 3.45 apply.
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under an agreement on paper or on another durable medium with the
consumer, in accordance with the terms of the regulated entity’s
authorisation.
3.7 Where a regulated entity deals with a person who is acting for a consumer
under a power of attorney, the regulated entity must:
a) obtain a certified copy of the power of attorney;
b) ensure that the power of attorney allows the person to act on the
consumer’s behalf; and
c) operate within the limitations set out in the power of attorney.
3.8 A regulated entity must not, in any communication or agreement with a
consumer (except where permitted by applicable legislation), exclude or
restrict, or seek to exclude or restrict:
a) any legal liability or duty of care to a consumer which it has under
applicable law or under this Code;
b) any other duty to act with skill, care and diligence which is owed to a
consumer in connection with the provision to that consumer of financial
services; or
c) any liability owed to a consumer for failure to exercise the degree of skill,
care and diligence that may reasonably be expected of it in the provision
of a financial service.
3.9 A regulated entity must ensure that all warning statements required by this
Code are prominent i.e. they must be in a box, in bold type and of a font size
that is at least equal to the predominant font size used throughout the
document or advertisement.
3.10 Where a regulated entity intends to amend or alter the range of services it
provides, it must give notice to affected consumers at least one month in
advance of the amendment being introduced.
3.11 Where a regulated entity intends to cease operating, merge with another, or
to transfer all or part of its regulated activities to another regulated entity it
must:
a) notify the Central Bank immediately;
b) provide at least two months notice to affected consumers to enable
them to make alternative arrangements;
c) ensure all outstanding business is properly completed prior to the
transfer, merger or cessation of operations or, alternatively in the case of
a transfer or merger, inform the consumer of how continuity of service
will be provided following the transfer or merger; and
d) in the case of a merger or transfer of regulated activities, inform the
consumer that their details are being transferred to the other regulated
entity, if that is the case.
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3.12 When intending to close, merge or move a branch, a credit institution must:
a) notify the Central Bank immediately;
b) provide at least two months notice to affected consumers to enable
them to make alternative arrangements;
c) ensure all business of the branch is properly completed prior to the
closure, merger or move, or alternatively inform the consumer of how
continuity of service will be provided; and
d) notify the wider community of the closure, merger or move in the local
press in advance.
RESTRICTIONS
Term and Notice Deposit Accounts
3.13 Prior to opening a joint account for two or more personal consumers, a
regulated entity must:
a) warn each personal consumer of the consequences of opening and
operating such a joint account;
b) specify the particular operations of the account for which consent is and
is not required from all account holders;
c) ascertain from the personal consumers whether statements are to be
provided separately to each of the joint account holders; and
d) ascertain from the personal consumers any limitations that they wish to
impose on the operations of the account.
Credit
3.14 A regulated entity must not offer unsolicited pre-approved credit to a
personal consumer.
3.15 A regulated entity may only increase a personal consumer’s credit limit with
the agreement of the personal consumer.
3.16 Where a regulated entity intends to impose a charge in respect of the
provision or arrangement of a loan to a personal consumer, and it is
proposed that this charge is incorporated into the loan amount advanced to
the personal consumer, the regulated entity must give the personal
consumer the right to pay this charge separately and not include it in the
loan.
Bundling and Contingent Selling
3.17 A regulated entity must not make the sale of a product or service contingent
on the consumer purchasing another product or service from the regulated
entity. This provision does not prevent a regulated entity from offering
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additional products or services to consumers who are existing customers
which are not available to potential consumers.
3.18 Where a credit institution requires a consumer to open a feeder account in
order to avail of another product, this shall not be prevented by Provision
3.17 where all of the following conditions are met:
a) the consumer must not be obliged to use the feeder account for
purposes other than facilitating payments to the product concerned;
b) charges cannot be applied for using the feeder account for the purpose
for which it was established;
c) where additional facilities are available on the feeder account they must
be optional and only activated if requested by the consumer; and
d) these conditions must be communicated clearly to the consumer.
3.19 A regulated entity is prohibited from bundling except where it can be shown
that there is a cost saving for the consumer.
3.20 Prior to offering, recommending, arranging or providing a bundled product, a
regulated entity must provide the consumer with the following information
on paper or on another durable medium:
a) the overall cost to the consumer of the bundle;
b) the cost to the consumer of each product separately;
c) how to switch products within the bundle;
d) the cost to the consumer of switching products within the bundle;
e) how to exit the bundle; and
f) the cost to the consumer of exiting the bundle.
3.21 Where a consumer wishes to switch one or more products in a bundle or exit
a bundle, the regulated entity must:
a) provide the consumer with the information set out in Provision 3.20 c)
and d) or 3.20 e) and f) as appropriate, on paper or on another durable
medium, and
b) allow the consumer to retain any product(s) in the bundle that the
consumer wishes to keep, without penalty or additional charge, apart
from the loss of any discount.
3.22 Where a regulated entity offers an optional extra to a consumer in
conjunction with a product or service, the regulated entity:
a) must inform the consumer on paper or on another durable medium:
i) that the consumer does not have to purchase the optional extra in
order to buy the main product or service;
ii) of the cost of the basic product or service (excluding the optional
extra); and
iii) of the cost of the optional extra;
and
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b) must not charge the consumer a fee for any optional extra offered in
conjunction with a product or service unless the consumer has confirmed
that he or she wishes to purchase the optional extra.
3.23 In relation to Provisions 3.20 to 3.22, if the means of communication
between the regulated entity and the consumer is by way of telephone only,
the regulated entity must:
a) provide this information orally at the time of offering, recommending,
arranging or providing a bundled product; and
b) provide this information to the consumer on paper or on another
durable medium immediately after arranging or providing a bundled
product.
Payment Protection Insurance
3.24 Where a regulated entity offers payment protection insurance in conjunction
with a loan, the regulated entity must:
a) exclude the payment protection premium from the initial repayment
estimate of the loan advised to the consumer and advise the consumer
of the amount of the premium separately; and
b) use separate application forms for the payment protection insurance and
for the loan.
Remuneration
3.25 A regulated entity may pay a fee, commission, other reward or remuneration
in respect of the provision of regulated activities only to a person that is:
a) a regulated entity;
b) a certified person;
c) an individual for whom a regulated entity has taken full and
unconditional responsibility under the Investment Intermediaries Act
1995;
d) an agent, branch or entity to which activities are outsourced in
accordance with the European Communities (Payment Services)
Regulations 2009 where the regulated entity remains fully liable for the
acts of that agent, branch or entity to which activities are outsourced;
e) a distributor, agent, branch or entity to which activities are outsourced in
accordance with the European Communities (Electronic Money)
Regulations 2011 where the regulated entity remains fully liable for the
acts of that distributor, agent, branch or entity to which activities are
outsourced;
f) an entity specifically exempted by law from requiring an authorisation,
licence or registration to carry out the regulated activity in respect of
which the fee, commission, other reward or remuneration is to be paid;
g) an credit intermediary (within the meaning of the Consumer Credit Act
1995 and the European Communities (Consumer Credit Agreements)
Regulations 2010); or
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h) no longer providing a regulated activity, where the fee, commission,
other reward or remuneration is in respect of a regulated activity that
the person provided when the person fell within any of the descriptions
at a) to g) above.
Deposit Agents
3.26 A deposit agent must not retain in its possession an account passbook of a
consumer.
3.27 A deposit agent must not operate from the same premises as a deposit
broker.
CONFLICTS OF INTEREST
3.28 A regulated entity must have in place and operate in accordance with a
written conflicts of interest policy appropriate to the nature, scale and
complexity of the regulated activities carried out by the regulated entity.
The conflicts of interest policy must:
a) identify, with reference to the regulated activities carried out by or on
behalf of the regulated entity, the circumstances which constitute or
may give rise to a conflict of interest entailing a risk of damage to the
interests of its customers who are consumers; and
b) specify procedures to be followed, and measures to be adopted, in order
to manage such conflicts.
3.29 Where conflicts of interest arise and cannot be reasonably avoided, a
regulated entity must:
a) disclose the general nature and/or source of the conflicts of interest to
the consumer. A regulated entity may only undertake business with or
on behalf of a consumer where there is directly or indirectly a conflicting
interest, where that consumer has acknowledged, on paper or on
another durable medium, that he or she is aware of the conflict of
interest and still wants to proceed; and
b) ensure that the conflict does not result in damage to the interests of the
consumer.
3.30 Where a regulated entity distributes its products to consumers through an
intermediary, the regulated entity must not require the intermediary to
introduce a specified level of business from consumers in order to retain an
appointment from that regulated entity.
3.31 Where a product producer distributes its products to consumers through an
intermediary and pays commission to an intermediary based on levels of
business introduced, the product producer must be able to demonstrate that
these arrangements:
15
a) do not impair the intermediary’s duty to act in the best interests of
consumers; and
b) do not give rise to a conflict of interest between the intermediary and
the consumer.
3.32 A regulated entity must ensure that its remuneration arrangements with
employees in respect of providing, arranging or recommending a product or
service to a consumer, are not structured in such a way as to have the
potential to impair the regulated entity’s obligations:
a) to act in the best interests of consumers; and
b) to satisfy the suitability requirements set out in Chapter 5 of this Code.
3.33 A regulated entity must ensure that there are effective Chinese walls in place
between the different business areas of the regulated entity, and between
the regulated entity and its connected parties, in relation to information
which could potentially give rise to a conflict of interest or be open to abuse.
3.34 A regulated entity must ensure it has written procedures in place relating to
the maintenance of Chinese walls, and the consequences of breaches of
Chinese walls. These procedures must be notified to all relevant officers and
employees of the regulated entity.
3.35 A regulated entity must take reasonable steps to ensure that it or any of its
officers or employees does not offer, give, solicit or accept any gifts or
rewards (monetary or otherwise) likely to conflict with any duties of the
recipient in relation to his or her activities in the regulated entity, or the
regulated entity.
3.36 A regulated entity must not enter into a soft commission agreement unless
such agreement is on paper or on another durable medium. Where a soft
commission agreement is in place, the following conditions apply:
a) any business transacted under a soft commission agreement must not
conflict with the best interests of consumers;
b) where a regulated entity considers that a consumer may be affected by
the soft commission agreement, the consumer must be made aware of
the soft commission agreement and of how the soft commission
agreement may affect them;
c) a copy of the soft commission agreement must be made available to the
consumer on request;
d) goods or services received by a regulated entity under a soft commission
agreement must be used to assist in the provision of services to
consumers; and
e) a regulated entity must provide to any affected consumer details of any
changes in its policy on soft commission agreements promptly after
implementation of any such changes.
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PERSONAL VISITS AND CONTACT WITH CONSUMERS
Personal Visits
3.37 A regulated entity must not make an unsolicited personal visit, at any time,
to a consumer who is an individual.
3.38 A regulated entity may only make a personal visit to a consumer who is an
individual if that consumer has given informed consent to being contacted by
the regulated entity by means of a personal visit. A regulated entity must
obtain informed consent separately for each personal visit and must maintain
a record of this consent.
3.39 In order to comply with Provision 3.38 above, a regulated entity must have
obtained the informed consent of a consumer who is an individual in relation
to:
a) the purpose(s) for which a personal visit is to be made, including in the
case of sales and marketing, the types of product to be discussed during
the personal visit, and
b) the time and date for the personal visit.
Telephone Contact
3.40 A regulated entity may make telephone contact with a consumer who is an
existing customer, only if:
a) the regulated entity has, within the previous twelve months, provided
that consumer with a product or service similar to the purpose of the
telephone contact;
b) the consumer holds a product, which requires the regulated entity to
maintain contact with the consumer in relation to that product, and the
contact is in relation to that product;
c) the purpose of the telephone contact is limited to offering protection
policies only; or
d) the consumer has given his or her consent to being contacted in this way
by the regulated entity.
3.41 A regulated entity may make telephone contact with a consumer other than
an existing customer, only if:
a) the consumer has signed a statement, within the previous twelve
months, giving the regulated entity permission to make telephone calls
to him or her for specified purposes and the contact is in respect of such
specified purposes;
b) the consumer has a listing in the business listing section of the current
telephone directory, classified telephone directory or in
trade/professional directories circulating in the State and contact is made
via the business telephone number;
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c) the consumer is a director of a company, or a partner in a firm with an
entry in one of the directories listed in b) above and contact is made via
the business telephone number of the company or firm in question and is
in connection with their role as director of the company or partner in the
firm;
d) the consumer is the subject of a referral for which the consumer has
provided express consent, received from an entity authorised to provide
financial services in Ireland, another entity within the same group, a
solicitor or a certified person; or
e) the purpose of the contact is limited to offering protection policies.
In relation to d) above, such a referral must be followed up by an indication
to the consumer by the regulated entity that the referral has been made and
asking for consent to proceed.
3.42 A regulated entity must ensure that, where it makes a telephone contact on
foot of a referral, it retains a record of the referral.
3.43 Telephone contact, made in accordance with this Code, may be made only
between 9.00 a.m. and 9.00 p.m. Monday to Saturday (excluding bank
holidays and public holidays), unless otherwise agreed with the consumer.
Personal Visits and Telephone Contact
3.44 When making a personal visit or telephone contact in accordance with this
Code, the representative of a regulated entity must immediately and in the
following order:
a) identify himself or herself by name, and the name of the regulated entity
on whose behalf he or she is being contacted and the commercial
purpose of the contact;
b) inform the consumer that the telephone contact is being recorded, if this
is the case;
c) where relevant, disclose to the consumer, the source of the business lead
or referral supporting the telephone contact; and
d) establish if the consumer wishes the personal visit or telephone contact
to proceed and, if not, end the contact immediately.
3.45 A regulated entity must abide by a request from a consumer not to make a
personal visit or telephone contact to him or her again for sales and
marketing purposes and this request must be recorded by the regulated
entity.
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PREMIUM HANDLING
3.46 An insurance intermediary must lodge money it receives in respect of a
premium or a premium rebate to a segregated bank account. Each such
account must be designated “Client Premium Account”.
3.47 An insurance intermediary must operate separate client premium accounts
in respect of life and non-life business.
3.48 A regulated entity must ensure that all payments from a client premium
account clearly state that the payment emanated from a client premium
account.
3.49 A regulated entity must ensure that a client premium account is never
overdrawn.
3.50 The following are the only debits and credits that may be passed through a
client premium account:
a) Credits (money in)
i) money received from the consumer in respect of the renewal of a
policy, which has been invited by an insurance undertaking, or a
proposal for insurance accepted by an insurance undertaking;
ii) money received from a regulated entity representing premium
rebated for onward transmission to the consumer;
iii) transfers from another client premium account operated by the
insurance intermediary for the same form of insurance;
iv) transfers from the insurance intermediary’s office account to allow a
‘buffer’ amount to be maintained in the client premium account (any
such transfers must be clearly identifiable);
v) proceeds received from a regulated entity in respect of the
settlement of a claim for onward transmission to the claimant;
vi) bank interest, if appropriate; and
vii) where mixed remittances are received, the total amount must first
be lodged to the appropriate client premium account.
b) Debits (money out)
i) money paid to a regulated entity on foot of renewal of a policy,
which has been accepted by an insurance undertaking, or a
proposal, accepted by an insurance undertaking;
ii) money paid to a consumer representing rebates of premiums
received from insurance undertakings;
iii) commissions and fees paid to the insurance intermediary for which
there is documentary proof that the funds are properly due to the
insurance intermediary;
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iv) transfers to another client premium account operated by the
insurance intermediary for the same form of insurance;
v) payments of claims settlement amounts to a consumer;
vi) bank interest, if appropriate;
vii) the portion of mixed remittances that does not relate to a premium
payment. Such remittances should be transferred to, or to the order
of, the consumer without delay; and
viii) payments in respect of charitable donations, in accordance with
Provision 7.2.
3.51 An insurance intermediary must carry out and retain, on a monthly basis, a
detailed reconciliation of amounts due to regulated entities with the balance
on each client premium account it operates.
PRODUCT PRODUCER RESPONSIBILITIES
3.52 In relation to a new investment product designed by a product producer to
be sold to consumers, the product producer must provide the following
details to an intermediary:
a) the key characteristics and features of the product;
b) the target market of consumers for the product;
c) the nature and extent of the risks inherent in the product; and
d) the level, nature, extent and limitations of any guarantee attaching to
the product and the name of the guarantor.
3.53 When selling an investment product to consumers through an intermediary
channel, a product producer must provide information to the intermediary
about the investment product that is clear, accurate, up to date and not
misleading, and includes the information outlined in Provisions 3.52 and 4.46.
3.54 The product producer must provide an ongoing facility to the intermediary to
ask questions and obtain information on an investment product in relation to
which information is provided to the intermediary pursuant to Provisions
3.52 and 4.46. The product producer must:
a) provide this facility to the intermediary for the duration of the period in
which that product is offered for sale by the product producer; and
b) inform the intermediary of his or her right to that ongoing facility.
3.55 Within the first year of launching an investment product which is sold to
consumers, and at least annually thereafter, a product producer must update
the information required under Provision 3.52 and provide that updated
information to the intermediary.
3.56 A regulated entity must maintain a publicly accessible register of all
mortgage intermediaries to which it has issued a current appointment.
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3.57 Upon the termination of the appointment of any mortgage intermediary, a
regulated entity must provide to the Central Bank a confirmation, on paper
or on another durable medium, that such mortgage intermediary has been
removed from the register maintained under Provision 3.56.
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CHAPTER 4
PROVISION OF INFORMATION
GENERAL REQUIREMENTS
4.1 A regulated entity must ensure that all information it provides to a consumer
is clear, accurate, up to date, and written in plain English. Key information
must be brought to the attention of the consumer. The method of
presentation must not disguise, diminish or obscure important information.
4.2 A regulated entity must supply information to a consumer on a timely basis.
In doing so, the regulated entity must have regard to the following:
a) the urgency of the situation; and
b) the time necessary for the consumer to absorb and react to the
information provided.
4.3 A regulated entity must ensure that, where it communicates with a
consumer using electronic media, it has in place appropriate arrangements to
ensure the security of information received from the consumer and the
secure transmission of information to the consumer.
4.4 A regulated entity must ensure that the font size used in all printed
information provided to consumers is:
a) clearly legible, and
b) appropriate to the type of document and the information contained
therein.
4.5 When a regulated entity publishes a notice regarding a change in interest
rates, the notice must state the old rate and the new rate and the date from
which the changes will apply.
CLARIFICATION OF SCOPE
Consumer Credit, Payment Services and Electronic Money
a) Where regulated entities are providing credit under credit agreements which fall
within the scope of the European Communities (Consumer Credit Agreements)
Regulations 2010 (S.I. No. 281 of 2010), only Provisions 4.7 to 4.11 and 4.26 apply.
b) Where regulated entities are providing payment services and/or issuing electronic
money, only Provisions 4.7 to 4.11 apply.
22
4.6 Where a regulated entity publishes interest rates on its information services,
including telephone helplines and websites, the regulated entity must update
such information services as soon as any interest rate change comes into
effect.
INFORMATION ABOUT REGULATORY STATUS
4.7 A regulated entity must only use a regulatory disclosure statement as set out
in Provision 4.10, in the following circumstances:
a) on its business stationery used in connection with its regulated
activities;
b) on the section of its website that relates to its regulated activities; and
c) on electronic communications with consumers (excluding SMS messages)
where such communications are in connection with its regulated
activities.
4.8 A regulated entity may only use the regulatory disclosure statement in
communications with a consumer where such communications relate solely
to a regulated activity.
4.9 A regulated entity must have separate sections on any website it operates,
for regulated activities and any other activities which it carries out.
4.10 A regulated entity must use a regulatory disclosure statement in either of the
following formats, depending on the Member State where it has been
authorised, registered or licensed:
a) “[Full legal name of the regulated entity, trading as (insert all trading
names used by the regulated entity)] is regulated by the Central Bank of
Ireland”; or
b) “[Full legal name of the regulated entity, trading as (insert all trading
names used by that regulated entity], is authorised/licensed or
registered by [insert name of the competent authority from which it
received its authorisation or licence, or with which it is registered] in
[insert name of the Member State where that competent authority
resides] and is regulated by the Central Bank of Ireland for conduct of
business rules.”
A regulated entity must not insert additional text into the wording of the
regulatory disclosure statements as set out above.
4.11 A regulated entity must ensure that its regulatory disclosure statement is not
presented in such a way as to appear to be an endorsement by the Central
Bank or other relevant EU competent authority of the regulated entity or its
products or services.
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INFORMATION ABOUT THE REGULATED ENTITY AND ITS REGULATED ACTIVITIES
4.12 A regulated entity must draw up its terms of business and provide each
consumer with a copy prior to providing the first service to that consumer.
4.13 The terms of business must set out the basis on which the regulated entity
provides its regulated activities and must include at least the following:
a) the legal name, trading name(s), address, and contact details of the
regulated entity;
b) if the regulated entity is part of a group, the name of the group to
which the regulated entity belongs;
c) confirmation that the regulated entity is authorised, licensed or
registered and the name of the competent authority that has
authorised, licensed or registered it;
d) a statement that it is subject to the [insert names of the Central Bank’s
Code(s) of Conduct which the regulated entity must comply with]
which offers protection to consumers and that the Code(s) can be
found on the Central Bank’s website www.centralbank.ie;
e) a description of the regulated activities that the regulated entity
provides;
f) if the regulated entity acts as an intermediary, a description of the level
of service it provides for each product type, i.e., whether fair analysis
of the market or limited analysis of the market and an explanation of
that type of service in a way that seeks to inform the consumer;
g) if the regulated entity is tied for any of the regulated activities it
provides, it must specify the name of each of the product(s) and/or
service(s) for which it is tied and the name of the regulated entity to
which it is tied for those product(s) and/or service(s);
h) a general statement of the charges imposed directly by the regulated
entity;
i) a summary of the regulated entity’s policy in relation to how it will use
a consumer’s personal data;
j) a summary of the regulated entity’s policy in relation to conflicts of
interest;
k) an outline of the action and remedies which the regulated entity may
take in the event of default by the consumer;
l) a summary of the complaints procedure operated by the regulated
entity;
m) if the regulated entity is a member of a statutory compensation
scheme, the name of the scheme and the nature and level of protection
available from the scheme; and
n) the effective date of the terms of business document.
4.14 A regulated entity must provide its terms of business to a consumer as a
stand-alone document.
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4.15 A deposit agent must ensure that each consumer is given a copy of the
relevant credit institution’s terms of business prior to providing the first
service to that consumer. Such terms of business must set out the nature of
the relationship between the credit institution and the deposit agent and the
basis on which the deposit agent’s regulated activities are provided.
4.16 The term ‘independent’ may only be used by an intermediary in its legal
name, trading name or any other description of the firm where:
a) the principal regulated activities of the intermediary are provided on the
basis of a fair analysis of the market; and
b) the intermediary allows the consumer the option to pay in full for its
services by means of a fee.
4.17 The term ‘independent’ may only be used in any trading name or other
description of a regulated activity where the intermediary:
a) provides the regulated activity on the basis of a fair analysis of the
market; and
b) allows the consumer the option to pay in full for the regulated activity
by means of a fee.
Where a regulated entity does not provide all of its regulated activities in an
independent capacity, it must explain the different nature of its services in a
way that seeks to inform the consumer. It must ensure that there is no
ambiguity about the range of services that it provides in an independent
capacity.
4.18 The term ‘broker’ may only be used where the principal regulated activities
of the intermediary are provided on the basis of a fair analysis of the market.
4.19 Where an intermediary does not provide a product or service on the basis of
a fair analysis of the market, it must clearly disclose to the consumer the
names of those product producers whose products or services it intends to
consider as part of its analysis.
4.20 Where an intermediary is tied to a single product producer for a particular
product or service, it must disclose this fact to the consumer in all
communications with the consumer in relation to that particular product or
service.
INFORMATION ABOUT PRODUCTS
4.21 Prior to offering, recommending, arranging or providing a product, a
regulated entity must provide information, on paper or on another durable
medium, to the consumer about the main features and restrictions of the
product to assist the consumer in understanding the product. To the extent
that the contract for the provision of the product is a distance contract for
25
the supply of a financial service under the European Communities (Distance
Marketing of Consumer Financial Services) Regulations 2004, the Regulations
apply in place of the requirement set out in the first sentence of this
provision.
4.22 A regulated entity must provide each consumer with the terms and
conditions attaching to a product or service, on paper or on another durable
medium, before the consumer enters into a contract for that product or
service. To the extent that the contract for the provision of the product is a
distance contract for the supply of a financial service under the European
Communities (Distance Marketing of Consumer Financial Services)
Regulations 2004, the Regulations apply in place of the requirement set out
in the first sentence of this provision.
Credit
4.23 Prior to credit being approved, a regulated entity must explain to a personal
consumer the effect of missing any of the scheduled repayments. The
implications and effects of missing the scheduled repayments must be
highlighted in all credit agreement documentation provided to the personal
consumer and the following warning statement must also appear in the
documentation:
Warning: If you do not meet the repayments on your credit
agreement, your account will go into arrears. This may affect
your credit rating, which may limit your ability to access credit in
the future.
4.24 Where a personal consumer’s formal application for credit is turned down by
the regulated entity, it must clearly outline to the personal consumer the
reasons why the credit was not approved. The regulated entity must offer to
provide the reasons, on paper or on another durable medium, to the
personal consumer. If requested by the personal consumer, the regulated
entity must provide the reasons, on paper or on another durable medium, to
the personal consumer.
4.25 Where a regulated entity:
a) offers credit on a fixed interest rate to a personal consumer; or
b) offers a personal consumer the option to fix their rate or to switch to a
fixed rate, on an existing credit agreement;
the regulated entity must provide, in the credit documentation, a worked
example specific to the personal consumer of the early redemption charge in
monetary terms and details in relation to the calculation of this charge.
4.26 Where credit is being offered to a personal consumer by a regulated entity
subject to a guarantee, the guarantee documentation must outline the
26
obligations of the guarantor and must contain the following warning
statement:
Warning: As a guarantor of this credit, you will have to pay off
the debt amount, the interest and all associated charges up to
the level of your guarantee if the borrower(s) do(es) not. Before
you sign this guarantee you should get independent legal advice.
4.27 Prior to offering, recommending, arranging or providing a loan to a personal
consumer for the purpose of consolidating other loans or credit, a regulated
entity must provide a personal consumer, on paper or on another durable
medium, with an indicative comparison of the total interest they will pay if
they continue with the existing facilities and the total interest payable over
the term of the consolidated facility on offer. Any assumptions used must be
reasonable and justifiable and must be clearly stated.
4.28 Where a regulated entity operates a website, it must publish on its website
the interest rates for mortgages which are currently available to consumers
from that regulated entity.
4.29 Where a regulated entity offers a mortgage to a personal consumer, the
regulated entity must include in the offer document:
a) the amount of the mortgage;
b) the interest rate that applies to the mortgage at the date of offer;
c) the term of the mortgage;
d) where there is a possibility that the interest rate set out in the offer
document may not be the interest rate applicable when the mortgage is
drawn down, this must be clearly highlighted. The offer document must
also outline the circumstances that would result in such a change to the
interest rate; and
e) the length of time for which the mortgage offer is valid, assuming that all
details provided by the personal consumer are correct and do not
change.
Insurance products
4.30 A regulated entity providing an insurance quotation to a consumer must
include the following information in the quotation, assuming that all details
provided by the consumer are correct and do not change:
a) the monetary amount of the quotation;
b) the length of time for which the quotation is valid; and
c) the full legal name of the relevant underwriter.
4.31 A regulated entity must set out clearly in the quotation provided to the
consumer any warranties or endorsements that apply to the policy. Where
the quotation is provided on paper or on another durable medium, this
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information must not be in a smaller font size than other information
provided in the document.
4.32 A regulated entity providing an insurance quotation to a consumer must set
out clearly any discounts or loadings that have been applied in generating the
quotation.
4.33 A regulated entity must, when offering a motor insurance policy to a
consumer, set out clearly for the consumer the basis on which an insurance
undertaking may calculate the value of the vehicle for the purposes of
settling a claim where the vehicle is deemed to be beyond economic repair
following a road traffic accident, fire or theft.
4.34 A regulated entity must state the full legal name of the relevant underwriter
on all insurance policy documentation and renewal notices issued to a
consumer.
4.35 A regulated entity must explain to a consumer, at the proposal stage, the
consequences for the consumer of failure to make full disclosure of relevant
facts, including:
a) the consumer’s medical details or history; and
b) previous insurance claims made by the consumer for the type of
insurance sought.
The explanation must include, where relevant,
i) that a policy may be cancelled;
ii) that claims may not be paid;
iii) the difficulty the consumer may encounter in trying to purchase
insurance elsewhere; and,
iv) in the case of property insurance, that the failure to have property
insurance in place could lead to a breach of the terms and conditions
attaching to any loan secured on that property.
4.36 Prior to a consumer completing a proposal form for a permanent health
insurance policy, a regulated entity must explain to the consumer:
a) the meaning of disability as defined in the policy;
b) the benefits available under the policy;
c) the general exclusions that apply to the policy; and
d) the reductions applied to the benefit where there are disability payments
from other sources.
4.37 Prior to a consumer completing a proposal form for a serious illness policy, a
regulated entity must explain clearly to the consumer the restrictions,
conditions and general exclusions that attach to that policy.
4.38 When offering a property or motor insurance policy to a consumer, a
regulated entity must, where relevant, explain to the consumer that, in the
28
event of a claim, the regulated entity may appoint its own builder or other
expert to undertake restitution work on a property or motor vehicle.
4.39 Where an insurance undertaking refuses to quote a consumer for motor or
property insurance, it must, within five business days of the refusal:
a) in the case of motor insurance, provide the consumer with its refusal and
its reasons for refusing cover, on paper or on another durable medium,
and notify the consumer of their right to refer the matter to the Declined
Cases Committee and the method of doing so.
b) in the case of property insurance, inform the consumer of its refusal and
its reasons for refusing cover and notify the consumer that failure to
have property insurance in place could lead to a breach of terms and
conditions attaching to any loan secured on that property. The
regulated entity must inform the consumer that they can request that
this information be provided on paper or on another durable medium
and must provide this information, on paper or on another durable
medium, to the consumer if so requested.
4.40 Prior to offering, recommending, arranging or providing an insurance policy
where the premium may be subject to review by the insurance undertaking
during the term of the policy, a regulated entity must:
a) explain clearly to the consumer the risk that the premium may increase;
and
b) provide the consumer with details of the period for which the initial
premium is fixed.
The following warning statement must be included on the application form
for the product:
Warning: The current premium [‘may’ or ‘will’ – delete as
appropriate] increase after [insert period of time for which the
premium is fixed].
This provision does not apply where the premium may be subject to review
as a result of an alteration to the policy that is requested by the consumer.
Lifetime mortgages and home reversion agreements
4.41 Prior to offering, recommending, arranging or providing a lifetime mortgage
to a personal consumer, a regulated entity must inform the personal
consumer of the consequences of purchasing a lifetime mortgage, and
provide the following information to the personal consumer on paper or on
another durable medium:
a) the circumstances in which the loan will have to be repaid;
b) details of the interest rate that will be charged;
29
c) an explanation of the impact of the rolling up of the interest over the
duration of the loan;
d) an indication of the amount required to repay the loan at maturity;
e) the effect on the existing mortgage, if any; and
f) an indication of the likely early redemption costs which would be
incurred if the loan was redeemed on the third
and fifth anniversary of
the loan and at five yearly intervals thereafter.
4.42 Prior to offering, recommending, arranging or providing a home reversion
agreement to a personal consumer, a regulated entity must inform the
personal consumer of the consequences of entering a home reversion
agreement and provide the following information to the personal consumer
on paper or on another durable medium:
a) the circumstances in which the agreement comes to an end;
b) the effect on the personal consumer’s existing mortgage, if any; and
c) in the case of a variable-share contract, an indication of the potential
change in the breakdown of the ownership of the property between that
held by the home reversion company and the personal consumer, over
the duration of the agreement.
4.43 Any assumptions used by the regulated entity to generate the information
required by Provisions 4.41 and 4.42 above, must be reasonable and
justifiable and must be clearly stated in the information provided to a
personal consumer.
4.44 Prior to offering, recommending, arranging or providing a lifetime mortgage
or a home reversion agreement to a personal consumer, a regulated entity
must ensure that the personal consumer is made aware of the importance of
seeking independent legal advice regarding the proposed transaction.
4.45 A regulated entity must include the relevant warning statements set out
below on the following, where they contain information regarding a lifetime
mortgage or home reversion agreement:
a) an application form;
b) any other document provided to the personal consumer; and
c) on its website.
For lifetime mortgages:
Warning: While no interest is payable during the period of the
mortgage, the interest is compounded on an annual basis and is
payable in full in circumstances such as death, permanent
vacation of or sale of the property.
and;
30
Warning: Purchasing this product may negatively impact on your
ability to fund future needs.
For home reversion agreements:
Warning: The money you receive may be much less than the
actual market value of the share in your home.
and;
Warning: Purchasing this product may negatively impact on your
ability to fund future needs.
Investment Products
4.46 Prior to offering, recommending, arranging or providing an investment
product, other than a tracker bond, a regulated entity must provide a
consumer with information on the following, where relevant:
a) capital security;
b) the risk that some or all of the investment may be lost;
c) leverage and its effects;
d) any limitations on the sale or disposal of the product;
e) restrictions on access to funds invested;
f) restrictions on the redemption of the product;
g) the impact, including the cost, of exiting the product early;
h) the minimum recommended investment period;
i) the risk that the estimated or anticipated return on the investment
product will not be achieved;
j) the potential effects of volatility in price, fluctuation in interest rates,
and/or movements in exchange rates on the value of the investment;
and
k) the level, nature, extent and limitations of any guarantee and the name
of the guarantor.
This information must be provided in a stand-alone document except where
such information is already required to be disclosed under the Life Assurance
(Provision of Information) Regulations 2001 or any other regulations made
under Section 43D of the Insurance Act 1989 concerning provision of
information for life assurance policies and where such information is
disclosed to the consumer in a manner which complies with such Regulations.
31
4.47 A regulated entity must include the following warning statement with all
illustrations:
Warning: These figures are estimates only. They are not a
reliable guide to the future performance of your investment.
4.48 Where a prospectus, other than a prospectus falling within the scope of the
Prospectus Directive (2003/71/EC), represents or contains the terms of a
contract between a regulated entity and one or more of its consumers, this
fact must be clearly stated in the prospectus.
4.49 A regulated entity must provide the following information in a prominent
position in a tracker bond product brochure, if any, and on a tracker bond
application form:
a) for investments in products that do not promise a 100% return of a
consumer’s capital on maturity, the following warning statement:
Warning: The value of your investment may go down as well as
up. You may get back less than you invest.
b) where the promised return is known but is less than the initial 100%
invested by a consumer, the following warning statement:
Warning: If you invest in this product you could lose [xx]% of
the money you invest.
c) if the promised return of capital is only applicable on a specific date, this
date and the following warning statement:
Warning: If you cash in your investment before [specify the
particular date] you may lose some or all of the money you
invest.
d) if there is no access to funds for the term of the product, the following
warning statement:
Warning: If you invest in this product you will not have any
access to your money for [insert time required before the
product matures].
e) the nature, extent and limitations of any guarantee attaching to the
product and the name of the ultimate provider of any guarantee.
32
4.50 A product producer of a tracker bond must produce and issue a “Key
Features Document” of a type referred to in Appendix A to this Code to any
intermediary that offers that tracker bond to consumers. Where the
information required by the Key Features Document is otherwise already
provided to the consumer as required under the Life Assurance (Provision of
Information) Regulations 2001 or any other regulations made under Section
43D of the Insurance Act 1989 requiring the provision of information to
consumers regarding life assurance policies, the regulated entity is not
obliged to include that information in the Key Features Document.
4.51 A regulated entity must provide a consumer with a Key Features Document
prior to the consumer signing an application form for a tracker bond. Where
relevant, the Key Features Document must explain to the consumer that the
consumer’s return on his or her investment will be capped/limited.
4.52 Where a regulated entity offers a consumer the facility to borrow funds to
invest in a tracker bond, the regulated entity must give the consumer an
illustration showing:
a) the year-by-year and total interest payments the consumer is likely to
have to pay in respect of the funds borrowed to invest in the tracker
bond, until the date the product matures;
i) for this purpose only, the fixed interest rate offered by the lender for
the period to the date of the promised payment under the tracker
bond, must be used.
ii) where the lender does not offer a fixed interest rate over this period,
an equivalent open market fixed interest rate should be used for this
purpose.
b) the equivalent compound annual rate of the promised payment under
the relevant tracker bond must be shown prominently; and
c) the difference between the promised payment under the tracker bond
and the total projected outgoings of the consumer (i.e. interest
payments related to the funds borrowed to invest, any capital
repayments related to such borrowings and any capital investment by
the consumer other than the borrowed funds) over the period to the
date of promised payment under the tracker bond.
4.53 Prior to offering, recommending, arranging or providing a Personal
Retirement Savings Account (PRSA), a regulated entity must provide a
consumer with the information set out in Appendix B to this Code. Where a
non-standard PRSA is offered or recommended to a consumer the regulated
entity must also complete the declaration set out in Appendix C to this Code.
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INFORMATION ABOUT CHARGES
4.54 Prior to providing a product or service to a consumer, a regulated entity
must:
a) provide the consumer, on paper or on another durable medium, with a
breakdown of all charges, including third party charges, which will be
passed on to the consumer; and
b) where such charges cannot be ascertained in advance, notify the
consumer that such charges will be levied as part of the transaction.
4.55 Where a regulated entity intends to impose a charge in respect of the
provision or arrangement of a loan to a personal consumer, and it is
proposed that this charge is incorporated into the amount advanced to the
personal consumer, the regulated entity must, prior to the personal
consumer signing an application form for a loan:
a) inform the personal consumer, on paper or on another durable medium,
that the personal consumer has the right to pay such a charge separately
and not include it in the loan; and
b) provide the following information to the personal consumer on paper or
on another durable medium:
i) the amount of the charge; and
ii) the overall cost of paying the charge over the term of the loan.
4.56 A regulated entity must display in its public offices, in a manner that is easily
accessible to consumers, a schedule of fees and charges imposed by that
regulated entity. If the regulated entity has a website, its schedule of fees
and charges must also be made publicly available through placing this
schedule on its website.
INFORMATION ABOUT REMUNERATION
4.57 Prior to offering, recommending, arranging or providing a product or service
a mortgage intermediary and a firm authorised under the Investment
Intermediaries Act 1995 must disclose, on paper or on another durable
medium, to a consumer the existence, nature and amount of any fee,
commission or other remuneration received or to be received from a product
producer in relation to that product or service. Where the amount cannot be
ascertained, the method of calculating that amount must be disclosed. The
disclosure must be in a manner that is comprehensive, accurate and
understandable.
This provision does not apply where the product or service relates to an
insurance policy.
4.58 Where remuneration is to be received by an intermediary from a product
producer on an ongoing basis in respect of a product or service, the
34
intermediary must disclose to the consumer on paper or on another durable
medium, prior to the provision of that product or service, the nature of the
service to be provided to the consumer in respect of this remuneration.
4.59 Prior to the sale of a non-life insurance product, an insurance intermediary
must:
a) disclose in general terms to a consumer that it is paid for the service
provided to the consumer by means of a remuneration arrangement
with the product producer;
b) inform the consumer of the amount of remuneration receivable in
respect of that service or that details of remuneration are available on
request; and
c) disclose in general terms to a consumer any remuneration arrangements
with product producers that are not directly attributed to the service
provided to an individual consumer but are based on levels of business
introduced by the intermediary to that product producer or that may be
perceived as having the potential to create a conflict of interest.
4.60 The disclosure required at Provision 4.59 must be in the terms of business or
through some other suitable mechanism, and with renewal notices.
4.61 Where an intermediary allows the consumer the option to pay for its services
by means of a fee, the option of payment by fee and the amount of the fee
must be explained in advance to the consumer. Where the intermediary
charges a fee and also receives commission in respect of the product or
service provided to the consumer, it must explain to the consumer whether
or not the commission will be offset against the fee, either in part or in full.
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CHAPTER 5
KNOWING THE CONSUMER AND SUITABILITY
KNOWING THE CONSUMER
5.1 A regulated entity must gather and record sufficient information from the
consumer prior to offering, recommending, arranging or providing a product
or service appropriate to that consumer. The level of information gathered
should be appropriate to the nature and complexity of the product or service
being sought by the consumer, but must be to a level that allows the
regulated entity to provide a professional service and must include details of
the consumer’s:
a) Needs and objectives including, where relevant:
i) the length of time for which the consumer wishes to hold a product,
ii) need for access to funds (including emergency funds),
iii) need for accumulation of funds.
b) Personal circumstances including, where relevant:
i) age,
ii) health,
iii) knowledge and experience of financial products,
iv) dependents,
v) employment status,
vi) known future changes to his/her circumstances.
c) Financial situation including, where relevant:
i) income,
ii) savings,
iii) financial products and other assets,
iv) debts and financial commitments.
CLARIFICATION OF SCOPE
Consumer Credit, Payment Services and Electronic Money
a) Where regulated entities are providing credit under credit agreements which fall
within the scope of the European Communities (Consumer Credit Agreements)
Regulations 2010 (S.I. No. 281 of 2010), the Provisions in this Chapter do not apply.
b) Where regulated entities are providing payment services and/or issuing electronic
money, the Provisions in this Chapter do not apply.
c) Where regulated entities are providing debt management services, Provision 5.19
does not apply.
36
d) where relevant, attitude to risk, in particular, the importance of capital
security to the consumer.
The regulated entity is only required to seek the information set out at a) to
d) above where it is relevant to the assessment of suitability to be carried out
under this Chapter.
5.2 In the case of a standard Personal Retirement Savings Account (PRSA), where
an employer has chosen a provider and the regulated entity makes a
presentation to employees, the regulated entity must gather and record the
following minimum relevant information namely, that the consumer:
a) is an employee of the firm;
b) has no other form of pension provisions; and
c) intends to select the default investment strategy of the provider.
5.3 A regulated entity must gather and maintain a record of details of any
material changes to a consumer’s circumstances prior to offering,
recommending, arranging or providing a subsequent product or service to the
consumer. Where there is no material change, this must be noted on a
consumer’s records.
5.4 Where a consumer refuses to provide information sought in compliance with
Provisions 5.1 and 5.3, the regulated entity must inform the consumer that,
as it does not have the relevant information necessary to assess suitability, it
cannot offer the consumer the product or service sought.
5.5 A regulated entity must endeavour to have the consumer certify the
accuracy of the information it has provided to the regulated entity.
Mortgages
5.6 Prior to providing a mortgage to a personal consumer, a mortgage lender
must either:
a) have had sight of all original supporting documentation evidencing the
personal consumer’s identity and ability to repay; or
b) receive from a mortgage intermediary a signed declaration that such
mortgage intermediary has had sight of all original supporting
documentation evidencing the personal consumer’s identity and ability
to repay.
A declaration signed by the personal consumer, (or his or her representative),
certifying income and/or ability to repay is not sufficient evidence for these
purposes.
5.7 A regulated entity must assess the reasonableness of the information
contained in the documentation submitted by a personal consumer in
37
support of a mortgage application and take all reasonable steps to ensure
that the documentation submitted is legitimate and authentic.
5.8 A regulated entity must ensure that it has had sight of an original valuation
report for the property which will act as security for the mortgage, prior to
providing a mortgage.
SUITABILITY
Assessing affordability of credit
5.9 Prior to offering, recommending, arranging or providing a credit product to a
personal consumer, a lender must carry out an assessment of affordability to
ascertain the personal consumer’s likely ability to repay the debt, over the
duration of the agreement. An affordability assessment must include
consideration of:
a) the information gathered under parts b) and c) of Provision 5.1; and
b) in the case of all mortgage products provided to personal consumers, the
results of a test on the personal consumer’s ability to repay the
instalments, over the duration of the agreement, on the basis of a 2%
interest rate increase, at a minimum, above the interest rate offered to
the personal consumer. This test does not apply to mortgages where the
interest rate is fixed for a period of five years or more.
Where the lender offers an introductory interest rate, it must carry out
the 2% interest rate test on the variable interest rate to be applied after
the introductory period has ended if known at the time of the offer of
the introductory interest rate, or on the current variable interest rate, if
the variable interest rate to be applied after the introductory period has
ended is not yet known.
The lender must notify the relevant intermediary, if any, of the results of
the assessment of affordability.
5.10 A mortgage intermediary must submit the information obtained from a
personal consumer under Provisions 5.1 and 5.3 to the relevant lender to
enable the affordability assessment(s) to be carried out.
5.11 In the case of an interest only mortgage, in addition to Provision 5.9 b), the
lender must carry out an assessment to ascertain the personal consumer’s
likely ability to repay the principal at the end of the mortgage term.
5.12 In the case of a mortgage provided on an interest-only basis for a duration
less than the term of the mortgage, in addition to Provision 5.9 b), a lender
38
must carry out an assessment to ascertain the personal consumer’s likely
ability to repay the capital and interest instalment amount that will apply at
the end of the interest-only period. This assessment must be on the basis of
a 2% interest rate increase, at a minimum, above the interest rate that will
apply at the end of the interest-only period if known at the time of the offer
of the interest-only mortgage, or on the current variable interest rate if the
variable interest rate to be applied after the ending of the interest-only
period is not yet known.
5.13 A regulated entity must take account of the result of the affordability
assessment when deciding whether a personal consumer is likely to be able
to repay the debt for that amount and duration in the manner required under
the credit agreement.
5.14 When offering or recommending a variable interest rate mortgage, a
regulated entity must provide a personal consumer, on paper or on another
durable medium, with figures reflecting the revised instalment amount
following a 2% interest rate increase above the variable interest rate offered.
Where the lender is offering an introductory interest rate, the revised
instalment amounts must reflect an increase of 2% on the variable interest
rate to be applied after the introductory period has ended if known at the
time of the offer of the introductory interest rate or the current variable
interest rate, if the variable interest rate to be applied after the introductory
period has ended is not yet known.
5.15 A lender must carry out a further affordability and suitability assessment
prior to advancing additional credit to a personal consumer, whether by way
of a top-up on an existing loan or by a new agreement to provide credit.
Assessing suitability
5.16 When assessing the suitability of a product or service for a consumer, the
regulated entity must, at a minimum, consider and document whether, on
the basis of the information gathered under Provision 5.1 and 5.3:
a) the product or service meets that consumer’s needs and objectives;
b) the consumer:
i) is likely to be able to meet the financial commitment associated with
the product on an ongoing basis;
ii) is financially able to bear any risks attaching to the product or
service;
c) in the case of credit products, a personal consumer has the ability to
repay the debt in the manner required under the credit agreement, on
the basis of the outcome of the assessment of affordability; and,
d) the product or service is consistent with the consumer’s attitude to risk.
39
5.17 A regulated entity must ensure that any product or service offered to a
consumer is suitable to that consumer, having regard to the facts disclosed by
the consumer and other relevant facts about that consumer of which the
regulated entity is aware.
The following additional requirements apply:
a) where a regulated entity offers a selection of product options to the
consumer, the product options contained in the selection must represent
the most suitable from the range available from the regulated entity;
and
b) where a regulated entity recommends a product to a consumer, the
recommended product must be the most suitable product for that
consumer.
5.18 A regulated entity must not advise a consumer to carry out an investment
product transaction, or a series of investment product transactions, with a
frequency or in amounts that, when taken together, are deemed to be
excessive and/or detrimental to the consumer’s best interests.
Where a consumer instructs a regulated entity to carry out an investment
product transaction, or series of investment product transactions, with a
frequency or in amounts that, when taken together, are deemed to be
excessive and/or detrimental to the consumer’s best interests, the regulated
entity must make a contemporaneous record that it has advised the
consumer that in its opinion the transaction(s) is/are excessive and/or
detrimental to the consumer’s best interests, if the consumer wishes to
proceed with the transaction(s).
Statement of suitability
5.19 Prior to providing or arranging a product or service, a regulated entity must
prepare a written statement setting out:
a) the reasons why a product or service offered to a consumer is considered
to be suitable to that consumer; or
b) the reasons why the product options contained in a selection of product
options offered to a consumer are considered to be the most suitable to
that consumer; or
c) the reasons why a recommended product is considered to be the most
suitable product for that consumer.
The reasons set out in the statement must reflect the information gathered
under Provision 5.1 to assist the consumer in understanding how the
product(s) or service(s) offered or recommended meets, where relevant, the
consumer’s:
i) needs and objectives;
ii) personal circumstances; and
iii) financial situation.
40
The written statement must also include an outline of the following, where
relevant:
iv) how the risk profile of the product is aligned with the consumer’s
attitude to risk; and
v) how the nature, extent and limitations of any guarantee attached to
the product is aligned with the consumer’s attitude to risk.
The regulated entity must sign the statement and provide a copy of this
statement on paper or on another durable medium, dated on the day on
which it is completed, to the consumer prior to providing or arranging a
product or service, and retain a copy.
5.20 A regulated entity must include the following notice at the beginning of the
statement of suitability or, if applicable, the statement of advice as required
under Provision 13.14:
Important Notice – Statement of Suitability [or Advice]
This is an important document which sets out the reasons why the
product(s) or service(s) [advice] offered or recommended is/are
considered suitable, or the most suitable, for your particular needs,
objectives and circumstances.
5.21 Where a regulated entity has provided an oral explanation to the consumer
of the product(s) or service(s) offered or recommended, a regulated entity
must include a record of such explanation in or with the statement of
suitability.
5.22 In the case of travel, motor and home insurance provided to a personal
consumer, the statement of suitability may be in a standard format.
5.23 In the case of insurance policies where immediate cover is required, a
statement of suitability may be issued to the consumer immediately after the
product has been provided.
EXEMPTION FROM KNOWING THE CONSUMER AND SUITABILITY
5.24 Provisions on Knowing the Consumer and Suitability do not apply where:
a) the consumer has specified both the product and the product producer
by name and has not received any assistance from the regulated entity
in the choice of that product and/or product producer; or
b) the regulated entity has established that the consumer is seeking a term
deposit of less than one year or a notice deposit account and has alerted
the consumer to any restrictions on the account.
41
The above exemption in Provision 5.24 a) does not apply where a personal
consumer is seeking:
i) a credit amount above €75,000;
ii) a mortgage;
iii) a home reversion agreement.
In relation to 5.24 a) above, prior to providing an investment product to a
consumer, a regulated entity must warn the consumer, on paper or on
another durable medium, that the regulated entity does not have the
information necessary to determine the suitability of that product for the
consumer.
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CHAPTER 6
POST-SALE INFORMATION REQUIREMENTS
GENERAL REQUIREMENTS
6.1 Where a regulated entity makes a material change to its terms of business, it
must provide each affected consumer with a revised terms of business as
soon as possible.
6.2 A regulated entity must inform a consumer that he or she may request the
statements referred to in Provisions 6.3, 6.5 and 6.16 to be provided on
paper and, if requested by the consumer, the regulated entity must provide
these statements on paper to the consumer.
INFORMATION ABOUT PRODUCTS
Term and Notice Deposit Accounts
6.3 In relation to all term and notice deposit accounts with a balance in excess of
€20, a credit institution must at least annually, provide to a consumer:
a) a statement of the account which includes, where applicable:
i) the opening balance;
ii) all additions;
iii) all withdrawals;
iv) all interest credited;
v) all charges;
vi) the closing balance;
vii) details of the interest rate(s) applied to the account during the
period covered by the statement; and
viii) where tax is deducted from interest credited, information on the tax
deducted or on how consumers may obtain a certificate detailing the
tax paid.
CLARIFICATION OF SCOPE
Consumer Credit, Payment Services and Electronic Money
a) Where regulated entities are providing credit under credit agreements which fall
within the scope of the European Communities (Consumer Credit Agreements)
Regulations 2010 (S.I. No. 281 of 2010), only Provision 6.8 in this Chapter applies.
b) Where regulated entities are providing payment services and/or issuing electronic
money, the Provisions in this Chapter do not apply.
43
b) details of interest rates applied to other similar accounts available to the
consumer from that credit institution; and
c) where the term of the account is less than one year, the credit institution
must provide to a consumer a closing statement which contains this
information.
6.4 A credit institution must ensure that at least 10 business days prior to the
maturity of a fixed term deposit, it alerts the consumer about its impending
maturity and the maturity date. This provision does not apply where the
maturity date of the fixed term deposit is less than 30 days.
Credit
6.5 In relation to loans, a regulated entity must, at least annually, provide to a
personal consumer a statement of the account which includes:
a) the opening balance;
b) all transactions;
c) all interest charged;
d) all charges;
e) the outstanding balance due; and
f) details of the interest rate(s) applied to the account during the period
covered by the statement.
6.6 A regulated entity must notify affected personal consumers on paper or on
another durable medium of any change in the interest rate on a loan. This
notification must include:
a) the date from which the new rate applies;
b) details of the old and new rate;
c) the revised repayment amount; and
d) an invitation for the personal consumer to contact the lender if he or she
anticipates difficulties meeting the higher repayments.
In the case of a mortgage where a revised repayment arrangement has been
put in place in accordance with the Code of Conduct for Mortgage Arrears,
the notification must clearly indicate the revised repayment amount required
in Part c) that applies to the revised repayment arrangement.
6.7 A regulated entity must provide the notification required under Provision
6.6 to a personal consumer at least 30 days in advance of any change in the
interest rate, except in the following circumstances:
a) in the case of a tracker interest rate, the regulated entity must provide
the notification required under Provision 6.6 as soon as possible, and no
later than 10 business days after the regulated entity becomes aware of
a change in the underlying rate being tracked; or
b) for loans other than mortgage loans, where the following conditions are
satisfied, the regulated entity does not need to provide the notification
44
required under Provision 6.6:
i) the change in the interest rate is caused by a change in a reference
rate which changes on a daily or weekly basis;
ii) the new reference rate is made publicly available by appropriate
means; and
iii) information concerning the new reference rate is kept available on
the premises of the regulated entity.
6.8 Where a regulated entity has advanced credit to a personal consumer
subject to a guarantee, the regulated entity must notify the guarantor, on
paper or on another durable medium, if the terms of the credit agreement
change.
6.9 Where
a) a personal consumer requests to change from an existing tracker
interest rate; or
b) a regulated entity offers a personal consumer the option to move from a
tracker interest rate to an alternative rate on their existing loan;
the lender must provide the personal consumer with the following
information on paper or on another durable medium:
i) indicative comparisons of the cost of the monthly loan repayments
at the personal consumer’s current tracker interest rate and each of
the alternative rate(s) being offered;
ii) an indicative comparison of the total cost of the loan if the personal
consumer continues with the existing tracker interest rate and the
total cost of the loan for each of the alternative rate(s) and terms
being offered. Any assumptions used must be reasonable and
justifiable and must be clearly stated; and
iii) details of the advantages and disadvantages for the personal
consumer of the tracker interest rate compared to each of the other
rate(s) being offered.
The following warning statement should also appear with the information
above, in circumstances where a personal consumer will not be able to revert
to a tracker interest rate if they move to an alternative rate:
Warning: If you switch to an alternative interest rate, you will
not be contractually entitled to go back onto a tracker interest
rate in the future.
This provision does not apply to a mortgage on a primary residence covered
by the Code of Conduct for Mortgages Arrears which is in “arrears” or “pre-
arrears” as defined in the Code of Conduct for Mortgage Arrears.
45
6.10 A regulated entity must allow the personal consumer at least one month to
consider any change proposed under Provision 6.9 and advise the personal
consumer of this entitlement.
6.11 Where a personal consumer waives the one month period provided for in
Provision 6.10, a regulated entity must receive written confirmation from the
personal consumer, prior to the proposed change, confirming that:
a) the personal consumer has been provided with the information required
under Provision 6.9; and
b) the personal consumer understands that he or she is waiving a one
month period to consider this information.
6.12 Where a regulated entity offers an incentive to a personal consumer on an
existing mortgage, the regulated entity must provide the personal consumer,
on paper or on another durable medium, with the information needed to
consider the incentive offered.
This information must:
a) quantify the implications for the personal consumer of availing of the
incentive including an indicative cost comparison of the total cost of the
existing mortgage if they do not avail of the incentive and the total cost
of the mortgage if they avail of the incentive;
b) clearly set out the length of time during which the incentive will be
available;
c) clearly set out any assumptions used, which must be reasonable and
justifiable;
d) set out the advantages and disadvantages to the personal consumer of
availing of the incentive;
e) include other key information which the personal consumer should have
available to them when considering the incentive; and
f) include a statement that the personal consumer may wish to seek
independent advice prior to availing of the incentive.
Insurance products
6.13 An insurance undertaking must issue policy documents, within five business
days of all relevant information being provided by the consumer and cover
being underwritten, to any consumer to whom it has sold its insurance policy
directly or to any insurance intermediary that has sold its insurance policy.
An insurance intermediary must, within five business days of receiving the
policy documents from an insurance undertaking, provide them to the
consumer.
This provision also applies in the case where the consumer renews an existing
policy.
46
6.14 When a consumer notifies a regulated entity of the intention to use an
insured vehicle in another Member State, the regulated entity must provide
the consumer with contact details of the regulated entity’s appointed claims
representative for that Member State.
6.15 Where a secondary market exists for a life assurance policy, and when the
holder of such a life assurance policy is a consumer and seeks information on
its early surrender, the regulated entity must notify to the consumer, at the
same time as it discloses the surrender value of the policy, that this
secondary market exists and that the policy may be sold on it.
Investment products
6.16 For each investment product held with it, a regulated entity must, at least
annually, provide to a consumer a statement in respect of the previous 12
month period, which includes, where applicable:
a) the opening balance or value;
b) all additions including additional amounts invested;
c) all withdrawals;
d) the total sum invested;
e) the number of units held;
f) all interest;
g) all charges and deductions affecting the investment product including
any charges associated with the management, sale, set up and ongoing
administration of the investment product; and
h) the closing balance or statement of the value of the investment.
6.17 A product producer of a tracker bond must produce and issue a document,
within five business days of the start of the tracker bond, to a consumer to
whom it has sold its tracker bond or to an intermediary that has sold its
tracker bond setting out:
a) the name(s) and address(es) of the consumer(s);
b) the date of investment;
c) the amount of the investment;
d) the date or dates on which the minimum payment is payable;
e) disclosure of the make up of the investment, if the make up differs from
that shown in the Key Features Document prepared in accordance with
Provision 4.50;
f) the date the investment will mature; and
g) if a consumer has the right to cancel the tracker bond within a certain
period of time from the sale, that the cooling off period of [Insert
number] days starts from [insert date: the commencement of the
investment date/date of receipt of policy document].
An intermediary must, within five business days of receiving this document,
provide it to the consumer(s) who purchased the tracker bond.
47
INFORMATION ABOUT CHARGES
6.18 A regulated entity must:
a) notify affected consumers of increases in charges, specifying the old and
new charge, or the introduction of any new charges, at least 30 days
prior to the change taking effect; and
b) where charges are accumulated and applied periodically to accounts,
notify consumers at least 10 business days prior to deduction of charges
and give each consumer a breakdown of such charges, except where
charges total an amount of €10 or less.
6.19 A regulated entity must notify, on paper or on another durable medium,
consumers who have been charged penalty charges, including surcharge
interest, of the methods by which these penalties may be mitigated.
48
CHAPTER 7
REBATES AND CLAIMS PROCESSING
PREMIUM REBATES
7.1 A regulated entity must issue a premium rebate to a consumer within five
business days of the rebate becoming due where the value of the premium
rebate is more than €10.
a) Where the regulated entity is an insurance undertaking, the premium
rebate becomes due as soon as the insurance undertaking becomes
aware of the circumstances giving rise to the premium rebate.
b) Where the regulated entity is an insurance intermediary, the premium
rebate becomes due when:
i) the insurance intermediary has received the premium rebate from
the relevant insurance undertaking; or
ii) the insurance undertaking has notified the insurance intermediary
that such rebate is due and permits the insurance intermediary to
issue the rebate from the funds held by the insurance intermediary
which are due to the insurance undertaking.
7.2 Where a premium rebate is due to a consumer, and the value of the rebate is
€10 or less the regulated entity must issue the premium rebate to the
consumer within five business days of the rebate becoming due, or,
alternatively, the regulated entity may offer the consumer the choice of:
a) receiving the premium rebate; or
b) receiving a reduction from a renewal premium or other premium
currently due to that regulated entity; or
c) the regulated entity making a donation of the rebate amount to a
registered charity.
CLARIFICATION OF SCOPE
Consumer Credit, Payment Services, Electronic Money and Health Insurance
a) Where regulated entities are providing credit under credit agreements which fall
within the scope of the European Communities (Consumer Credit Agreements)
Regulations 2010 (S.I. No. 281 of 2010), the Provisions in this Chapter do not apply.
b) Where regulated entities are providing payment services and/or issuing electronic
money, the Provisions in this Chapter do not apply.
c) Where a method of direct settlement is used by health insurers, Provisions 7.6 to
7.21 do not apply.
49
In respect of options b) and c) above, the regulated entity must seek the
consumer’s consent on each occasion and must maintain a record of the
consumer’s decision.
Where the consumer has agreed under option c) that a charitable donation
can be made, the regulated entity must document the donation and retain a
receipt from the relevant charity.
7.3 An insurance intermediary may handle premium rebates due to consumers
only where an express agreement exists whereby the insurance intermediary
acts as agent of a regulated entity in passing rebates to consumers so that in
handling the rebated premium the insurance intermediary does not become
a debtor of the consumer.
7.4 An insurance intermediary must transfer the rebate amount to the consumer
in full. Any charges that the consumer may owe the insurance intermediary
must not be recovered from the rebate amount due to the consumer without
the prior written agreement of the consumer in each instance and a record of
such agreement must be maintained by the insurance intermediary. Where
the consumer has agreed to the deduction of any charges these must be
clearly outlined on the accompanying notification of the rebate to the
consumer.
7.5 Where an insurance intermediary has issued a rebate cheque to a consumer,
and the rebate cheque has not been presented for payment within six
months from the date of issue, the insurance intermediary must return the
rebate to the insurance undertaking. Should the consumer seek the rebate
in the future, it must be issued by the insurance undertaking or by the
insurance intermediary in accordance with Provisions 7.1 or 7.2 above.
CLAIMS PROCESSING
7.6 A regulated entity must endeavour to verify the validity of a claim received
from a claimant prior to making a decision on its outcome.
7.7 A regulated entity must have in place a written procedure for the effective
and proper handling of claims. At a minimum, the procedure must provide
that:
a) where an accident has occurred and a personal injury has been suffered,
a copy of the Personal Injuries Assessment Board Claimant Information
Leaflet is issued to the claimant as soon as the regulated entity is
notified of the claim;
b) where the potential claimant has been involved in a motor accident with
an uninsured or unidentified vehicle or with a foreign registered vehicle,
the regulated entity must advise the potential claimant to contact the
50
Motor Insurance Bureau of Ireland (MIBI);
c) where a claim form is required to be completed, it is issued to the
claimant within five business days of receiving notice of a claim;
d) the regulated entity must offer to assist in the process of making a claim,
including, where relevant, alerting the claimant to policy terms and
conditions that may be of benefit to the claimant;
e) a record must be maintained of all conversations with the claimant in
relation to the claim; and
f) the regulated entity must, while the claim is ongoing, provide the
claimant with updates of any developments affecting the outcome of the
claim within ten business days of the development. When additional
documentation or clarification is required from the claimant, the
claimant must be advised of this as soon as required and, if necessary,
issued with a reminder on paper or on another durable medium.
7.8 An insurance intermediary who assists a consumer in making a claim must on
receipt of the completed claims documentation, transmit such
documentation to the relevant regulated entity within one business day.
7.9 Where a regulated entity engages the services of a loss adjustor and/or
expert appraiser it must notify the claimant of the contact details of the loss
adjuster and/or expert appraiser it has appointed to assist in the processing
of the claim and that such loss adjuster and/or expert appraiser acts in the
interest of the regulated entity and the regulated entity must maintain a
record of this notification.
7.10 In the case of motor insurance and property insurance claims, and other
claims where relevant, the regulated entity must notify the claimant that the
claimant may appoint a loss assessor to act in their interests but that any
such appointment will be at the claimant’s expense and the regulated entity
must maintain a record of this notification.
7.11 At the claimant’s request and with the claimant’s written consent, a
regulated entity must engage with a third party which a claimant has
appointed to act on his or her behalf in relation to a claim.
7.12 A regulated entity must be available to discuss all aspects of the claim with
the claimant, including assessment of liability and damages, during normal
office hours, or outside of these hours if agreed with the claimant.
7.13 Where an insurance undertaking appoints a third party to undertake
restitution work in respect of a claim, the insurance undertaking must
provide the claimant in advance and on paper or on another durable
medium, with details of the scope of the work that has been approved and
the cost.
51
7.14 Where a method of direct settlement has been used, a regulated entity:
a) must not ask the claimant to certify any restitution work carried out by a
third party appointed by the insurance undertaking; and
b) must certify, on paper or on another durable medium, to the claimant
that the restitution work carried out by the third party appointed by the
insurance undertaking has been carried out to restore the claimant’s
property at least to the standard that existed prior to the insured event.
7.15 A regulated entity must ensure that any claim settlement offer made to a
claimant is fair, taking into account all relevant factors, and represents the
regulated entity’s best estimate of the claimant’s reasonable entitlement
under the policy.
7.16 A regulated entity must, within ten business days of making a decision in
respect of a claim, inform the claimant, on paper or on another durable
medium, of the outcome of the investigation explaining the terms of any
offer of settlement. When making an offer of settlement, the regulated
entity must ensure that the following conditions have been satisfied:
a) the insured event has been proven, or accepted by the regulated entity;
b) all specified documentation has been received by the regulated entity
from the claimant; and
c) the entitlement of the claimant to receive payment under the policy has
been established.
7.17 A regulated entity must allow a claimant at least ten business days to accept
or reject the offer. Where the claimant waives this right and accepts the
settlement offer within this timeframe, the regulated entity must retain a
record of this decision.
This provision does not apply in the case of surrender or encashment of life
assurance investment policies or to claims on life assurance protection
policies where the settlement amount is set out in the policy terms and
conditions and/or the policy schedule.
7.18 Where a claimant has agreed to accept the offer made by the regulated
entity to settle a claim, the regulated entity must discharge the claim within
ten business days from the date the claimant has agreed to accept the offer,
once the appropriate amount has been agreed subject to finalisation of legal
costs, where applicable.
Where a method of direct settlement is being applied, the regulated entity
must discharge the claim without delay.
7.19 If the regulated entity decides to decline the claim, the reasons for that
decision must be provided to the claimant on paper or on another durable
medium.
52
7.20 A regulated entity must provide a claimant with written details of any
internal appeals mechanisms available to the claimant.
7.21 Where the policyholder who is a consumer is not the beneficiary of the
settlement the policyholder must be advised, on paper or on another durable
medium, by the regulated entity, at the time that settlement is made, of the
final outcome of the claim including the details of the settlement. Where
applicable, the policyholder must be informed that the settlement of the
claim will affect future insurance contracts of that type.
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CHAPTER 8
ARREARS HANDLING
GENERAL
8.1 A regulated entity must have in place written procedures for the handling of
arrears.
8.2 A regulated entity must make the following information available for
personal consumers, including on a dedicated section of any website it
operates:
a) general information to encourage a personal consumer to deal with
arrears and stating the benefits of dealing with arrears;
b) relevant contact details of the regulated entity for dealing with arrears;
c) details on the charges that may be imposed on personal consumers in
arrears; and
d) a link to the Money Advice and Budgeting Service (MABS) website.
The information on the website must be easily accessible from a prominent
link on the homepage.
8.3 Where an account is in arrears, a regulated entity must seek to agree an
approach (whether with a personal consumer or through a third party
nominated by the personal consumer in accordance with Provision 8.5) that
will assist the personal consumer in resolving the arrears.
8.4 Where an account remains in arrears ten business days after the arrears first
arose, a regulated entity must immediately communicate clearly with the
personal consumer to establish in the first instance why the arrears have
arisen.
8.5 At the personal consumer’s request and with the personal consumer’s
written consent, a regulated entity must liaise with a third party nominated
by the personal consumer to act on his or her behalf in relation to an arrears
CLARIFICATION OF SCOPE
a) The provisions in this Chapter only apply in respect of loans (including credit cards)
held by a personal consumer.
b) The provisions in this Chapter do not apply to the extent that the loan is a mortgage
loan to which the Code of Conduct for Mortgage Arrears applies.
54
situation. This does not prevent the regulated entity from contacting the
personal consumer directly in relation to other matters.
PROVISION OF INFORMATION
8.6 Where an account remains in arrears 31 calendar days after the arrears first
arose, a regulated entity must within three business days inform the
personal consumer and any guarantor of the loan, on paper or on another
durable medium, of the status of the account. This information must include
the following:
a) the date the account fell into arrears;
b) the number and total amount of repayments (including partial
repayments) missed (this information is not required for credit card
accounts);
c) the amount of the arrears to date;
d) the interest rate applicable to the arrears;
e) details of any charges in relation to the arrears that may be applied;
f) the importance of the personal consumer engaging with the regulated
entity in order to address the arrears;
g) relevant contact points;
h) the consequences of continued non-payment, including where relevant,
sharing of data relating to the consumer’s arrears with the Irish Credit
Bureau or any other credit reference agency;
i) if relevant, any impact of the non-payment on other accounts held by the
personal consumer with that regulated entity including the potential for
off-setting of accounts, where there is a possibility that this may occur
under existing terms and conditions; and
j) a statement that the personal consumer may wish to seek assistance
from MABS and contact details for the MABS National Helpline and the
link to the MABS website.
8.7 Where a personal consumer has purchased payment protection insurance
(PPI) from the regulated entity in relation to the loan account or credit card
account which subsequently went into arrears, the communication required
under Provision 8.6 must also advise the personal consumer of the following:
a) that the personal consumer has purchased PPI;
b) the personal consumer’s policy number; and
c) that the regulated entity will provide the personal consumer with a copy
of the policy on request.
8.8 Where the arrears persist, an updated version of the information required in
Provision 8.6 must be provided to the personal consumer, on paper or on
another durable medium, every three months.
8.9 In respect of a mortgage, where a third full or partial repayment is missed
and remains outstanding and an alternative repayment arrangement has not
55
been put in place, a regulated entity must notify the personal consumer, on
paper on another durable medium, of the following:
a) the potential for legal proceedings and proceedings for repossession of
the property, together with an estimate of the costs to the personal
consumer of such proceedings;
b) the importance of seeking independent advice, for example from MABS;
and
c) that, irrespective of how the property is repossessed and disposed of,
the personal consumer will remain liable for the outstanding debt,
including accrued interest, charges, legal, selling and other related costs,
if this is the case.
8.10 A regulated entity must inform the personal consumer, on paper or on
another durable medium, when it intends to appoint a third party to engage
with the personal consumer in relation to arrears and must explain the role
of the third party.
REVISED REPAYMENT ARRANGEMENTS
8.11 Where a regulated entity reaches an agreement on a revised repayment
arrangement with a personal consumer, the regulated entity must, within
five business days, provide the personal consumer, on paper or on another
durable medium, with a clear explanation of the revised repayment
arrangement and clarification on what data relating to the consumer’s
arrears will be shared with the Irish Credit Bureau or any other relevant
credit reference agency.
8.12 Where arrears arise on an account and where a personal consumer makes an
offer of a revised repayment arrangement that is rejected by the regulated
entity, the regulated entity must formally document its reasons for rejecting
the offer and communicate these to the personal consumer, on paper or on
another durable medium.
COMMUNICATIONS
8.13 A regulated entity must ensure that the level of contact and communications
from the regulated entity, or any third party acting on its behalf, with a
personal consumer in arrears, is proportionate and not excessive.
8.14 Each calendar month, a regulated entity, and/or any third party acting on its
behalf, must not initiate more than three unsolicited communications, by
whatever means, to a personal consumer in respect of arrears.
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The three unsolicited communications include any communication where
contact is attempted but not made with the personal consumer but do not
include:
a) any communication that has been requested by, or agreed in advance
with, the personal consumer; and
b) any communication to the personal consumer the sole purpose of which
is to comply with the requirements of this Code or other regulatory
requirements.
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CHAPTER 9
ADVERTISING
GENERAL REQUIREMENTS
9.1 A regulated entity must include a regulatory disclosure statement, which
meets the requirements set out in Provision 4.10, in all advertisements.
9.2 A regulated entity must ensure that:
a) the design, presentation and content of an advertisement is clear, fair,
accurate and not misleading;
b) an advertisement does not seek to influence a consumer’s attitude to
the advertised product or service or the regulated entity either by
ambiguity, exaggeration or omission; and
c) the nature and type of the advertised product or service is clear and not
disguised in any way.
9.3 Without limiting the generality of Provision 9.2, a regulated entity must
ensure that an advertisement is not misleading in particular in relation to:
a) the regulated entity’s independence or the independence of the
information it provides;
b) the regulated entity’s ability to provide the advertised product or
service;
c) the scale of the regulated entity’s activities;
d) the extent of the resources of the regulated entity;
e) the nature of the regulated entity’s or any other person’s involvement in
the advertised product or service;
f) the scarcity of the advertised product or service;
g) past performance or possible future performance of the advertised
product or service.
CLARIFICATION OF SCOPE
Consumer Credit, Payment Services and Electronic Money
a) Where regulated entities are providing credit under credit agreements which fall
within the scope of the European Communities (Consumer Credit Agreements)
Regulations 2010 (S.I. No. 281 of 2010), the Provisions in this Chapter do not apply.
b) Where regulated entities are providing payment services and/or issuing electronic
money, only Provisions 9.1 to 9.18, 9.30 and 9.31 apply.
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9.4 A regulated entity must ensure when publishing an advertisement that its
name is clearly shown in all advertisements.
9.5 A regulated entity must ensure that an advertisement is designed and
presented so that any consumer can reasonably be expected to know
immediately that it is an advertisement.
9.6 A regulated entity must ensure that:
a) key information, in relation to the advertised product or service, is
prominent and is not obscured or disguised in any way by the content,
design or format of the advertisement; and
b) small print or footnotes are only used to supplement or elaborate on the
key information in the main body of the advertisement and must be of
sufficient size and prominence to be clearly legible.
9.7 A regulated entity must ensure that any qualifying criteria in relation to:
a) obtaining a minimum price for the advertised product or service; or
b) benefiting from potential maximum savings relating to the advertised
product or service
is included in the main body of the advertisement.
9.8 A regulated entity must ensure that warning statements required by this
Chapter:
a) meet the criteria specified in Provision 3.9; and
b) appear simultaneously with the benefits of the advertised product or
service.
In the case of non-print media, it is sufficient that the warning statements are
outlined at the end of the advertisement.
9.9 It is not necessary for a regulated entity to display the warning statements
required by this Chapter if the advertisement does not refer to the benefits
of a product or service but only names the product or service and/or invites a
consumer to discuss the product or service in more detail with the regulated
entity.
9.10 A regulated entity must ensure that an advertisement that uses promotional
or introductory interest rates clearly states the expiry date of that interest
rate and provides an indication of the rate that will apply thereafter.
9.11 A regulated entity must ensure that any assumptions, on which a statement,
promise or forecast contained in an advertisement is based, are clearly
stated, reasonable and up to date.
9.12 A regulated entity must ensure that an advertisement that promotes more
than one product sets out clearly the key information relating to each
product in such a way that a consumer can distinguish between the products.
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9.13 A regulated entity must ensure that any recommendations or
commendations quoted are complete, fair, accurate and not misleading at
the time of issue, and relevant to the advertised product or service.
9.14 A regulated entity must ensure that a recommendation or commendation
may not be used in an advertisement without the consent of the author. If
the author is an employee of the regulated entity or a connected party of the
regulated entity, or has received any payment from the regulated entity or a
connected party of the regulated entity for the recommendation or
commendation, the advertisement must state that fact.
9.15 Where an intermediary is tied to a single provider for a particular product or
service, the intermediary must disclose this fact in all advertisements for the
advertised product or service.
9.16 A regulated entity must ensure that comparisons or contrasts are based
either on facts verified by the regulated entity, or on reasonable assumptions
stated within the advertisement. They should be presented in a clear, fair
and balanced way and not omit anything material to the comparison or
contrast. Material differences between the products must be set out clearly.
9.17 A regulated entity must ensure that an advertisement which contains any
initialisms or acronyms (for example AER, EAR, CAR, APR etc.) also states
what the letters stand for.
9.18 A regulated entity must ensure that an advertisement only describes a
product or service as free where the product or service in its entirety is
available free of charge to the consumer.
CREDIT: ADVERTISING TO PERSONAL CONSUMERS
9.19 A regulated entity must ensure that an advertisement for a residential
mortgage contains the following warning statement:
Warning: If you do not keep up your repayments you may lose
your home.
9.20 A regulated entity must ensure that where an advertisement includes an
annual percentage rate, the advertisement must clearly state if the interest
rate is fixed or variable. In the case of a fixed interest rate, the term of the
fixed interest rate must be displayed and an indication must be given of the
rate that will apply thereafter.
9.21 A regulated entity must ensure that an advertisement for a term loan, if
displaying the annual percentage rate and the term, also displays the total
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cost of credit by means of an example. This provision does not apply to the
provision of loans for mortgage credit.
9.22 A regulated entity must ensure that an advertisement for a fixed-rate loan
contains the following warning statement:
Warning: You may have to pay charges if you pay off a fixed-rate
loan early.
9.23 A regulated entity must ensure that an advertisement for personal lending
contains the following warning statement:
Warning: If you do not meet the repayments on your loan, your
account will go into arrears. This may affect your credit rating,
which may limit your ability to access credit in the future.
9.24 A regulated entity must ensure that advertisements for the consolidation of
two or more debts, where sample figures are offered in the advertisement,
indicate the difference between the total cost of credit of the consolidated
credit facilities and the total cost of credit of the individual credit facilities
that are the subject of the consolidation.
9.25 A regulated entity must ensure that an advertisement for a debt
consolidation mortgage contains the following warning statement:
Warning: This new loan may take longer to pay off than your
previous loans. This means you may pay more than if you paid
over a shorter term.
9.26 A regulated entity must ensure that an advertisement for a variable-rate
mortgage contains the following warning statement:
Warning: The cost of your monthly repayments may increase.
9.27 A regulated entity must ensure that an advertisement for an interest-only
mortgage contains the following warning statement:
Warning: The entire amount that you have borrowed will still be
outstanding at the end of the interest-only period.
9.28 A regulated entity must ensure that an advertisement for a lifetime
mortgage contains the following warning statements:
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Warning: While no interest is payable during the period of the
mortgage, the interest is compounded on an annual basis and is
payable in full in circumstances such as death, permanent
vacation of or sale of the property.
and;
Warning: Purchasing this product may negatively impact on your
ability to fund future needs.
9.29 A regulated entity must ensure that an advertisement for a home reversion
agreement contains the following warning statements:
Warning: The money you receive may be much less than the
actual market value of the share in your home.
and;
Warning: Purchasing this product may negatively impact on your
ability to fund future needs.
SAVINGS
9.30 A regulated entity must ensure that where an interest rate for a savings or
deposit account is displayed in an advertisement, it clearly states the
following:
a) whether the interest rate quoted is fixed or variable, and if fixed, for
what period and, where relevant, an indication of the rate that will apply
thereafter;
b) the relevant interest rate for each term quoted together with the annual
equivalent rate, and each rate must be of equal size and prominence;
c) the minimum term and/or minimum amount required to qualify for a
specified rate of interest, if applicable; and
d) if any tax is payable on the interest earned.
9.31 A regulated entity must ensure that:
a) the annual equivalent rate as contained in an advertisement is not
misleading;
b) any assumptions used in the calculation of the annual equivalent rate are
reasonable, up to date and clearly stated; and
c) a record of the manner of the calculation of the annual equivalent rate is
maintained.
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INVESTMENT PRODUCTS
9.32 A regulated entity must ensure that an advertisement for a product where
the consumer may not get back 100% of the initial capital invested contains
the following warning statement:
Warning: If you invest in this product you may lose some or all of
the money you invest.
9.33 A regulated entity must ensure that an advertisement for a product where
the promised return of capital is only applicable on a specific date, contains
the following warning statement:
Warning: If you cash in your investment before [specify the
particular date] you may lose some or all of the money you
invest.
9.34 A regulated entity must ensure that an advertisement for a product where
there is no access to funds for the term of the product contains the following
warning statement:
Warning: If you invest in this product you will not have any
access to your money for [insert time required before the
product matures].
9.35 Where a regulated entity gives information about the past performance of
the advertised product or service or of the regulated entity, this information
must:
a) be based on a product similar to that being advertised;
b) not be selected so as to exaggerate the success or disguise the lack of
success of the advertised product or service;
c) state the source of the information;
d) be based on actual performance;
e) state clearly the period chosen, which must be related to the term of the
product being advertised;
f) include the most recent period;
g) indicate, where they arise, details of transaction costs, interest and
taxation that have been taken into account; and
h) state, where applicable, the basis upon which performance is quoted.
9.36 A regulated entity must ensure that an advertisement which contains
information on past performance contains the following warning statement:
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Warning: Past performance is not a reliable guide to future
performance.
9.37 Where a regulated entity has a position or holding in the product or service
that is the subject of an advertisement by that regulated entity, it must
include a statement to this effect in the advertisement.
9.38 Where a regulated entity gives information in an advertisement about the
simulated performance of the advertised product or service or of a regulated
entity, this information must:
a) be based on a simulated performance that is relevant to the
performance of the advertised product or service or of the regulated
entity;
b) not be selected so as to exaggerate the success or disguise the lack of
success of the advertised product or service or of the regulated entity;
c) state the source; and
d) indicate whether, and to what extent, transaction costs, interest and
taxation have been taken into account.
9.39 A regulated entity must ensure that an advertisement which contains
illustrations or information on simulated performance must also contain the
following warning statement:
Warning: These figures are estimates only. They are not a
reliable guide to the future performance of this investment.
9.40 A regulated entity must ensure that an advertisement must not describe a
product as guaranteed or partially guaranteed unless:
a) there is a legally enforceable agreement with a third party who
undertakes to meet, to whatever extent is stated in the advertisement,
the consumer’s claim under the guarantee;
b) the regulated entity has made, and can demonstrate that it has made, an
assessment of the value of the guarantee;
c) it clearly states the level, nature and extent of limitations of the
guarantee and the name of the guarantor; and
d) where it is the case, the advertisement must state that the guarantee is
from a connected party of the regulated entity.
9.41 A regulated entity must ensure that where an advertisement contains a
reference to the impact of taxation, it must:
a) state the assumed rate of taxation;
b) state, where applicable, that the tax reliefs are those currently applying,
and state that the value of the tax reliefs referred to in the
advertisement apply directly to the consumer, to the provider of the
advertised product or service or its provider, as appropriate;
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c) state, where applicable, that the matters referred to are only relevant to
a particular class or classes of consumer with particular tax liabilities,
identifying the class or classes of consumer and the type of liabilities
concerned;
d) state who has the responsibility for obtaining the tax benefits advertised;
e) not describe the advertised product or service as being free from any
liability to income tax unless equal prominence is given to a statement,
where applicable, that the income is payable from a product from which
income tax has already been paid; and
f) not describe the advertised product or service as being free from any
liability to capital taxation unless equal prominence is given to a
statement, where applicable, that the value of the advertised product or
service is linked to a product which is liable to capital taxation.
9.42 A regulated entity must ensure that where the advertised product or service
can fluctuate in price or value, an advertisement contains the following
warning statement:
Warning: The value of your investment may go down as well as
up.
9.43 A regulated entity must ensure that where the return on an advertised
product or service is not set until a particular date (for example, the maturity
date of the advertised product or service), this is clearly stated.
9.44 A regulated entity must ensure that where a product that is the subject of an
advertisement is described as being likely to yield income or as being suitable
for a consumer particularly seeking income, and where the income from such
product can fluctuate, the advertisement contains the following warning
statement:
Warning: The income you get from this investment may go down
as well as up.
9.45 Where a product that is the subject of an advertisement offers the facility of
a planned withdrawal from capital as an income equivalent, a regulated
entity must ensure that the effect of the withdrawal upon such a product is
clearly explained in the advertisement.
9.46 A regulated entity must ensure that where an advertised product or service
is denominated or priced in a foreign currency, or where the value of an
advertised product or service may be directly affected by changes in foreign
exchange rates, the advertisement contains the following warning statement:
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Warning: This [product/service] may be affected by changes in
currency exchange rates.
9.47 A regulated entity must ensure that an advertisement for a product, which is
not readily realisable, states that it may be difficult for consumers to sell or
exit the product and/or obtain reliable information about its value or extent
of the risks to which it is exposed.
9.48 A regulated entity must ensure that an advertisement for a product that
cannot be encashed prior to maturity, or which incurs an early redemption
charge if encashed prior to maturity, clearly states that this is the case.
9.49 A regulated entity must ensure that an advertisement for a product subject
to front-end loading states that:
a) deductions for charges and expenses are not made uniformly throughout
the life of the product, but are loaded onto the early period;
b) if the consumer withdraws from the product in the early period, the
practice of front-end loading will impact on the amount of money which
the consumer receives; and
c) if applicable, that a consumer may not get back the full amount they
invested.
9.50 Where a regulated entity advertises an interest rate relating to a proportion
of the tracker bond to be placed on deposit, the advertisement must also
clearly state the following:
a) whether the rate quoted is fixed or variable, and if fixed, for what period
and, where relevant, an indication of the rate that will apply thereafter;
b) the relevant compound annual rate, over the full term of the tracker
bond, applicable to the proportion of the tracker bond to be placed on
deposit; and
c) whether any tax is payable on the interest earned.
Each rate provided to a consumer under this provision must be of equal font
size and prominence.
9.51 Where a regulated entity advertises a projected return on investment for a
tracker bond, the regulated entity must ensure that the value of the
projected return of that tracker bond is expressed and shown as prominently
as the equivalent compound annual rate.
9.52 Where a regulated entity advertises a projected return on investment for a
tracker bond, where there are parts of that tracker bond invested separately,
the regulated entity must ensure that the value of the return on the amount
invested in each of the component parts of that tracker bond over the full
term of the tracker bond is expressed and shown as prominently as the
equivalent compound annual rate.
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CHAPTER 10
ERRORS AND COMPLAINTS RESOLUTION
ERRORS
10.1 A regulated entity must have written procedures in place for the effective
handling of errors which affect consumers. At a minimum, these procedures
must provide for the following:
a) the identification of the cause of the error;
b) the identification of all affected consumers;
c) the appropriate analysis of the patterns of the errors, including
investigation as to whether or not it was an isolated error;
d) proper control of the correction process; and
e) escalation of errors to compliance/risk functions and senior
management.
10.2 A regulated entity must resolve all errors speedily and no later than six
months after the date the error was first discovered, including:
a) correcting any systems failures;
b) ensuring effective controls are implemented to prevent any recurrence
of the identified error;
c) effecting a refund (with appropriate interest) to all consumers who have
been affected by the error, where possible; and
d) notifying all affected consumers, both current and former, in a timely
manner, of any error that has impacted or may impact negatively on the
cost of the service, or the value of the product, provided, where possible.
10.3 Where an error which affects consumers has not been fully resolved (as
outlined in Provision 10.2) within 40 business days of the date the error was
first discovered, a regulated entity must inform the Central Bank, on paper
or on another durable medium, within five business days of that deadline.
CLARIFICATION OF SCOPE
Code of Conduct on Mortgage Arrears (CCMA)
With effect from 1 July 2013, in accordance with provision 55 of the CCMA, to the extent
that the loan is a mortgage loan to which the CCMA applies and the complaint is submitted
by a borrower in relation to the lender’s treatment of the borrower’s case under the CCMA,
or the lender’s compliance with the requirements of the CCMA, the lender must apply
provisions 10.7 to 10.12 of this Code.
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10.4 A regulated entity must not benefit from any balance arising out of a refund,
which cannot be repaid, in respect of an error.
10.5 A regulated entity must maintain a log of all errors which affect consumers.
This log must contain:
a) details of the error;
b) the date the error was discovered;
c) an explanation of how the error was discovered;
d) the period over which the error occurred;
e) the number of consumers affected;
f) the monetary amounts involved;
g) the status of the error;
h) the date the error was resolved;
i) the number of consumers refunded; and
j) the total amount refunded.
10.6 A regulated entity must maintain a record of all steps taken to resolve an
error which affects consumers, including details of the steps taken where:
a) any affected consumers were dissatisfied with the outcome;
b) there were difficulties contacting affected consumers; and
c) a refund could not be repaid.
COMPLAINTS RESOLUTION
10.7 A regulated entity must seek to resolve any complaints with consumers.
10.8 When a regulated entity receives an oral complaint, it must offer the
consumer the opportunity to have this handled in accordance with the
regulated entity’s complaints process.
10.9 A regulated entity must have in place a written procedure for the proper
handling of complaints. This procedure need not apply where the complaint
has been resolved to the complainant’s satisfaction within five business days,
provided however that a record of this fact is maintained. At a minimum this
procedure must provide that:
a) the regulated entity must acknowledge each complaint on paper or on
another durable medium within five business days of the complaint
being received;
b) the regulated entity must provide the complainant with the name of one
or more individuals appointed by the regulated entity to be the
complainant’s point of contact in relation to the complaint until the
complaint is resolved or cannot be progressed any further;
c) the regulated entity must provide the complainant with a regular
update, on paper or on another durable medium, on the progress of the
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investigation of the complaint at intervals of not greater than 20
business days, starting from the date on which the complaint was made;
d) the regulated entity must attempt to investigate and resolve a complaint
within 40 business days of having received the complaint; where the 40
business days have elapsed and the complaint is not resolved, the
regulated entity must inform the complainant of the anticipated
timeframe within which the regulated entity hopes to resolve the
complaint and must inform the consumer that they can refer the matter
to the relevant Ombudsman, and must provide the consumer with the
contact details of such Ombudsman; and
e) within five business days of the completion of the investigation, the
regulated entity must advise the consumer on paper or on another
durable medium of:
i) the outcome of the investigation;
ii) where applicable, the terms of any offer or settlement being made;
iii) that the consumer can refer the matter to the relevant Ombudsman,
and
iv) the contact details of such Ombudsman.
10.10 A regulated entity must maintain an up-to-date log of all complaints from
consumers subject to the complaints procedure. This log must contain:
a) details of each complaint;
b) the date the complaint was received;
c) a summary of the regulated entity’s response(s) including dates;
d) details of any other relevant correspondence or records;
e) the action taken to resolve each complaint;
f) the date the complaint was resolved; and
g) where relevant, the current status of the complaint which has been
referred to the relevant Ombudsman.
10.11 A regulated entity must maintain up to date and comprehensive records for
each complaint received from a consumer.
10.12 A regulated entity must undertake an appropriate analysis of the patterns of
complaints from consumers on a regular basis including investigating
whether complaints indicate an isolated issue or a more widespread issue for
consumers. This analysis of consumer complaints must be escalated to the
regulated entity’s compliance/risk function and senior management.
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CHAPTER 11
RECORDS AND COMPLIANCE
RECORDS
11.1 A regulated entity must ensure that all instructions from or on behalf of a
consumer, including the date of both the receipt and transmission of the
instruction, are recorded.
11.2 A regulated entity must ensure that any decision in the exercise of its
discretion on behalf of a consumer with respect to a product is recorded.
11.3 A regulated entity must ensure that, where it accepts an instruction from a
consumer that is subject to any condition imposed by the consumer, it
maintains a record of the condition to which the instruction is subject.
11.4 A regulated entity must maintain a list of its customers who are consumers
as defined by this Code.
11.5 A regulated entity must maintain up-to-date records containing at least the
following:
a) a copy of all documents required for consumer identification and profile;
b) the consumer’s contact details;
c) all information and documents prepared in compliance with this Code;
d) details of products and services provided to the consumer;
e) all correspondence with the consumer and details of any other
information provided to the consumer in relation to the product or
service;
f) all documents or applications completed or signed by the consumer;
g) copies of all original documents submitted by the consumer in support of
an application for the provision of a service or product; and
h) all other relevant information and documentation concerning the
consumer.
11.6 A regulated entity must retain details of individual transactions for six years
after the date on which the particular transaction is discontinued or
CLARIFICATION OF SCOPE
Payment Services and Electronic Money
Where regulated entities are providing payment services and/or issuing electronic money,
only Provisions 11.5 to 11.10 apply.
70
completed. A regulated entity must retain all other records for six years
from the date on which the regulated entity ceased to provide any product
or service to the consumer concerned.
11.7 A regulated entity must maintain complete and readily accessible records;
however, a regulated entity is not required to keep records in a single
location.
COMPLIANCE WITH THIS CODE
11.8 Where the Central Bank requires a regulated entity to provide information in
respect of the regulated entity’s compliance with this Code, such regulated
entity is required to provide information which is full, fair and accurate in all
respects and not misleading and to do so in any period of time or format that
may be specified by the Central Bank.
11.9 Where the Central Bank requires information in respect of a regulated
entity’s compliance with this Code, and the Central Bank is of the opinion
that a meeting with personnel of the regulated entity should take place in
order to procure such information in a satisfactory manner, the regulated
entity must arrange for appropriate personnel to participate in such a
meeting in order to provide the required information to the Central Bank.
11.10 A regulated entity must, upon being required by the Central Bank to do so,
provide, to the Central Bank, records evidencing compliance with this Code
for a period which the Central Bank may specify (up to a maximum period of
six years).
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CHAPTER 12
DEFINITIONS
In this Code:
“advertisement” means any commercial communication in respect of a regulated
entity, which is addressed to the consumer public or a section of it, the purpose
being to advertise a regulated activity or a regulated entity excluding name plaques,
sponsorship material and a prospectus drawn up in accordance with the Prospectus
Directive (2003/71/EC);
“advertised product or service” means the product or service that is the subject of
an advertisement;
”arrears” arise where a personal consumer:
a) has not made a full repayment, or only makes a partial repayment, as set out
in the original loan account contract, by the scheduled due date; or
b) in the case of a credit card account, has not made the minimum repayment
by the due date.
“associate” in relation to a person means:
a) an undertaking in the same group as that person;
b) any other person whose business, private or familial relationship with the
first person or its associate might reasonably be expected to give rise to a
community of interest between them which may involve a conflict of interest
in dealings with third parties; or
c) any other persons whose business, private or familial relationship (other than
as arises solely because that person is a client of the firm) with the first
person is such that he or she has influence over that person’s judgment as to
how to invest his property or exercise any rights attaching to his investments;
“associated undertaking” means an associated undertaking within the meaning of
Regulation 34 of the European Communities (Companies Group Accounts)
Regulations 1992;
“bundling” means the packaging of two or more distinct products into a bundle,
where each of these products can be purchased separately from or through the
regulated entity;
“business day” means any day except Saturday, Sunday, bank holidays and public
holidays;
“Central Bank” means the Central Bank of Ireland;
72
“certified person” has the meaning given to it in Section 55 of the Investment
Intermediaries Act 1995;
“charges” means any cost or fee which a consumer must pay in connection with a
product or service provided by a regulated entity;
“Chinese walls” means an arrangement within the organisation of the regulated
entity (or between the regulated entity and any associate of that regulated entity)
which requires information held by the regulated entity (or as the case may be, any
associate of that regulated entity, or a particular operating unit within the regulated
entity or within any associate of that regulated entity in the course of carrying on
one part of its business of any kind) to be withheld in certain circumstances from
other operating units or from persons with whom it deals in the course of carrying
on another part of its business of any kind;
“claimant” means a person making a claim under an insurance policy and can be a
person, other than the policyholder;
“complaint” refers to an expression of grievance or dissatisfaction by a consumer,
either orally or in writing, in connection with:
a) the provision or the offer of the provision of a product or service to a
consumer by a regulated entity; or
b) the failure or refusal of a regulated entity to provide a product or service to a
consumer;
“compound annual rate” is the equivalent annual rate of interest (where interest is
paid on previously earned interest as well as on the principal), payable at the end of
the year, on a deposit;
“connected party” shall, except where otherwise stated, include a partner, officer,
controller, associated undertaking, related undertaking or subsidiary undertaking or
employee of the regulated entity, including any associate of the person concerned;
“consumer” means any of the following:
a) a person or group of persons, but not an incorporated body with an annual
turnover in excess of €3 million in the previous financial year (for the
avoidance of doubt a group of persons includes partnerships and other
unincorporated bodies such as clubs, charities and trusts, not consisting
entirely of bodies corporate); or
b) incorporated bodies having an annual turnover of €3 million or less in the
previous financial year (provided that such body shall not be a member of a
group of companies having a combined turnover greater than the said €3
million);
and includes where appropriate, a potential ‘consumer’ (within the meaning above);
73
“credit institution” means an undertaking within the meaning of Article 4(1) of EU
Directive 2006/48/EC the business of which is to receive deposits or other repayable
funds from the public and to grant credits for its own account;
“customer” means any person to whom a regulated entity provides or offers to
provide a product or service the subject of this Code, and any person who requests
such a product or service;
“debt management firm” has the meaning given to it by Section 28 of the Central
Bank Act 1997 (as amended);
“debt management services” has the meaning given to it by Section 28 of the
Central Bank Act 1997 (as amended);
“default investment strategy” has the meaning in Part X of the Pensions Act 1990;
“deposit agent” means any person who holds an appointment on paper or on
another durable medium from a single credit institution enabling him to receive
deposits on behalf of that institution and prohibiting him from acting in a similar
capacity on behalf of another credit institution;
“deposit broker” means any person who brings together with credit institutions
persons seeking to make deposits in return for a fee, commission or other reward;
“durable medium” means any instrument that enables a recipient to store
information addressed personally to the recipient in a way that renders it accessible
for future reference for a period of time adequate for the purposes of the
information and which allows the unchanged reproduction of the information
stored;
“electronic money” has the meaning given to it in the European Communities
(Electronic Money) Regulations 2011 (S.I. No. 183 of 2011);
“employee” means a person employed under a contract of service or a person
otherwise employed by a regulated entity;
“fair analysis of the market” means providing services on the basis of a sufficiently
large number of contracts and product producers available on the market to enable
the intermediary to make a recommendation, in accordance with professional
criteria, regarding which contract would be adequate to meet the consumer’s needs;
“group” includes a company, its parent and its subsidiaries and any associated
undertaking or related undertaking;
“home reversion agreement” has the meaning given to it in Part V of the Central
Bank Act 1997;
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“insurance intermediary” has the meaning given to it in the European Communities
(Insurance Mediation) Regulations 2005;
“insurance undertaking” has the meaning given to it in the Insurance Act 1989;
“introductory interest rate” is an interest rate favourable to the consumer that
applies for a specified period of time at the beginning of the contract;
“investment product” means an “investment instrument” within the meaning of
Section 2 of the Investment Intermediaries Act 1995 but does not include:
i. non-life insurance policies; and
ii. life assurance products which do not have a surrender or maturity value;
“key information” means any information which is likely to influence a consumer’s
actions with regard to a product or service;
“lifetime mortgage” means a loan secured on a borrower’s home where:
a) interest payments are rolled up on top of the capital throughout the term of
the loan;
b) the loan is repaid from the proceeds of the sale of the property; and
c) the borrower retains ownership of their home whilst living in it;
“limited analysis of the market” means providing services on the basis of a limited
number of contracts and product producers available on the market, i.e., while not
tied to one product producer the services are not provided on the basis of a fair
analysis of the market;
“Member State” means a Member State of the European Economic Area;
“MiFID Service” means any service or activity set out in Schedule 1 of the European
Communities (Markets in Financial Instruments) Regulations 2007, but not including
any service or activity of a person to whom such Regulations do not apply by virtue
of Regulations 5(1), 5(2) and 5(3) of such Regulations;
“mortgage intermediary” has the meaning specified in Section 2 of the Consumer
Credit Act 1995;
“officer” in relation to a regulated entity, means a director, chief executive, manager
or secretary, by whatever name called, or an office or position, the holder of which
reports directly to a director, chief executive, manager or secretary;
“outsourced activity” is where a regulated entity employs another person (other
than a natural person who is an employee of the regulated entity under a contract
of service) to carry out an activity on its behalf;
“payment services” has the meaning given to it in the European Communities
(Payment Services) Regulations 2009 (S.I. No. 383 of 2009);
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“person” means a natural person or a legal person;
“personal consumer” means a consumer who is a natural person acting outside his
or her business, trade or profession;
“Personal Injuries Assessment Board” means the Personal Injuries Assessment
Board established under the Personal Injuries Assessment Board Act 2003 and now
known as InjuriesBoard.ie, or any successor thereto;
“Personal Insolvency Practitioner” means a person authorised, under Part 5 of the
Personal Insolvency Act 2012, to act as a personal insolvency practitioner;
“power of attorney” has the meaning assigned to it in the Powers of Attorney Act
1996;
“product producer” means any regulated entity that produces, manufactures or
packages a product of a financial or investment nature, and is not limited to a
product producer as defined in the Investment Intermediaries Act 1995;
“protection policies” for the purposes of this Code include the following:
a) insurances of a class falling within the European Communities (Non-Life
Insurance) Framework Regulations 1994; and
b) insurances of classes I, III and IV as set out in Annexe I of the European
Communities (Life Assurance) Framework Regulations 1994 where the
purpose and intention of the policy is solely to provide protection;
“PRSA” has the meaning in Part X of the Pensions Act 1990;
“record” means any document, file or information (whether stored electronically or
otherwise) and which is capable of being reproduced in a legible form;
“regulated activities” are the provision of products or services that are provided in
this State by a regulated entity and which are subject to the regulation of the
Central Bank and a “regulated activity” is the provision of any one such product or
service;
“regulated entity” means a financial services provider authorised, registered or
licensed by the Central Bank or other EU or EEA Member State that is providing
regulated activities in the State;
“related undertaking” means:
a) companies related within the meaning of section 140(5) of the Companies
Act 1990;
b) undertakings where the business of those undertakings is carried on in such a
way that the separate business of each undertaking, or a substantial part
thereof, is not readily identifiable; or
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c) undertakings where the decision as to how and by whom each shall be
managed can be made either by the same person or by the same group of
persons acting in concert;
“retail credit” means the provision of credit (as defined in Section 28 of the Central
Bank Act 1997) to relevant persons (as defined in Section 28 of the Central Bank Act
1997);
“soft commission agreement” means any agreement under which a regulated entity
receives goods or services, in return for which it agrees to direct business through or
in the way of another person;
“sponsorship material” means material that only communicates the regulated
entity’s brand name, rather than the promotion of a specific financial
product/service;
“standard financial statement” is the document which a debt management firm
must use to obtain financial information from a consumer in order to complete a
financial assessment, notified by the Central Bank of Ireland to debt management
firms and which current document is set out in Appendix E. This document may be
subject to change from time to time, where notified by the Central Bank;
“Standard PRSA” has the meaning in Part X of the Pensions Act 1990;
“target market” for an investment product means the profile of the group of
consumers at which the regulated entity aims a particular investment product;
“terms of business” means the document in which a regulated entity sets out the
basis on which it will conduct business with consumers;
“tracker bond” means a deposit or life assurance policy which has either or both of
the following features:
a) it provides for a minimum payment, at the expiration of a specified period of
time, of a specified percentage of the amount of capital invested by the
consumer in the product;
b) it provides for a potential cash bonus payable after a specified period of time,
which is linked to, or determined by, changes over the period of investment
in the level of one or more recognised stock market indices, commodity
prices, any other recognised financial indices or the price of one or more
securities specified at the outset or from time to time;
“tracker interest rate” means a mortgage interest rate which tracks a rate which
comes from a publicly available source which can be verified by both the consumer
and the regulated entity, including without limitation, a rate that tracks the
European Central Bank (ECB) main refinancing operations rate ;
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“variable-share contract” means a home reversion agreement where the portion of
the property held by the regulated entity changes during the term of the home
reversion agreement;
“vulnerable consumer” means a natural person who:
a) has the capacity to make his or her own decisions but who, because of
individual circumstances, may require assistance to do so (for example,
hearing impaired or visually impaired persons); and/or
b) has limited capacity to make his or her own decisions and who requires
assistance to do so (for example, persons with intellectual disabilities or
mental health difficulties).
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CHAPTER 13
ADDITIONAL REQUIREMENTS FOR DEBT MANAGEMENT
FIRMS
PROVISION OF INFORMATION
INFORMATION ABOUT DEBT MANAGEMENT SERVICES
13.1 Prior to entering into an agreement with a consumer, a debt management
firm must provide the consumer with a standard information template on
‘What you should know about Debt Management Services’ in the form set out
in Appendix D.
GENERAL
13.2 A debt management firm must not provide debt management services to a
consumer unless the consumer has signed an agreement which clearly
specifies:
a) The services that will be provided;
b) the charges payable for those services;
c) when the charges will be payable and how they can be paid;
d) the likely duration of the agreement;
e) whether or not the debt management firm is authorised to hold client
funds and make payments on behalf of the consumer to his or her
creditors; and
f) any charges that will be payable if the consumer withdraws from the
agreement and when those charges will be payable.
This information must be provided to the consumer in a standalone document
which also includes the following warning statement:
Warning:
You may still have debt outstanding after completing the debt management
process
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RESTRICTIONS
13.3 A debt management firm must not accept payment for any charges for the
provision of debt management services until it has received the agreement
under Provision 13.2 signed by the consumer.
13.4 A debt management firm must not recommend or arrange credit, and must
not assist the consumer to arrange credit, for the purpose of paying fees or
charges for debt management services.
13.5 Where a consumer proposes to avail of credit to pay fees or charges to a debt
management firm for debt management services, the debt management firm
must inform the consumer that such borrowings will increase the amount of
debt owed by the consumer.
13.6 A debt management firm must not pay a fee, commission, other reward or
remuneration to any person in respect of client leads or referrals.
13.7 A debt management firm must not contact a consumer whose details were
referred to it by a person unless the consumer has given his or her specific
consent to that person for his or her details to be referred to that specific debt
management firm.
13.8 A debt management firm must not prevent or seek to obstruct a
consumer from communicating directly with his or her creditors.
13.9 A debt management firm must not provide a completed standard financial
statement to a consumer’s creditor(s) unless the debt management firm has
received the consumer’s prior written consent to do so.
KNOWING THE CONSUMER AND SUITABILITY
KNOWING THE CONSUMER
13.10 In the case of debt management services, a debt management firm must use
a standard financial statement to obtain the financial information required
under Provision 5.1.
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SUITABILITY
13.11 A debt management firm must seek to agree a long term solution for the
consumer.
13.12 When providing debt management services to a consumer, in addition to the
requirements outlined in Provision 5.16, a debt management firm must at
least consider and document:
a) whether the following options are suitable to the consumer’s needs and
objectives:
i) arrangements with creditors to apply reduced payments for an
interim period (for example to address a short-term shortfall);
ii) arrangements with creditors to reschedule debt (for example by
reducing interest rates and/or making payments over a longer term);
iii) arrangements with creditors to restructure the outstanding debt (for
example debt write-down/debt write off); or
iv) insolvency options;
and
b) whether the proposed course of action for the consumer is likely to be
affordable and suitable for that consumer.
c) whether the proposed course of action could impact on the consumer’s
eligibility for or ability to pursue a formal insolvency arrangement in the
future.
13.13 A debt management firm must not advise a consumer to carry out a
transaction, or series of transactions, with a frequency or in amounts that,
when taken together, are deemed to be detrimental to the consumer’s best
interests.
Statement of advice
13.14 Once a debt management firm has identified a proposed course of action for a
consumer, the debt management firm must prepare a written statement of
advice setting out the reasons why the course of action proposed to the
consumer is considered to be suitable and affordable for that consumer.
a) The reasons set out in the statement of advice must be based on the
information gathered under Provision 5.1 and Provision 13.10 and include
an explanation of the options available to the consumer, how these
options work and a description of the consequences for the consumer of
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accepting such options. This should include a description of the actual or
potential consequences of the proposed course of action and include the
following, where relevant:
i) that the consumer is responsible for making payments to creditors
and for undertaking the actions proposed and may engage a third
party to assist them;
ii) that creditors are not obliged to accept reduced repayments or freeze
interest or charges;
iii) that creditors’ collection activities may continue even though a debt
management firm has been engaged;
iv) that if the consumer cancels payments to their creditors, they will be
in breach of their agreement and their account(s) will go into arrears
or further into arrears;
v) that reducing their payments may mean it takes longer to pay off their
creditors and they may pay more than if they paid over a shorter
term;
vi) that if the consumer is a property owner, as part of any arrangement,
they may be required to re-mortgage their property to pay off some
or all of their debts. Their ability to do so may be restricted and a
mortgage may only be offered at a higher interest rate;
vii) that if the consumer is a property owner that, where relevant, failure
to make the negotiated payments to creditors could result in the
consumer losing his or her home, and
viii) that undertaking the proposed course of action may affect their credit
rating, which may limit their ability to access credit in the future.
b) Where the debt management firm assesses that insolvency options are
the most suitable course of action for the consumer, the debt
management firm must advise the consumer of the opportunity to avail of
the services of a Personal Insolvency Practitioner in order to explore
insolvency options.
c) The debt management firm must sign the statement of advice and
provide a copy of this statement on paper or on another durable medium,
dated on the day on which it is completed, to the consumer and must
retain a copy for six years from the date on which the debt management
firm ceased to provide any service to the consumer concerned.
13.15 Where relevant, the statement required under Provision 13.14 must set out:
a) any cost savings to the consumer;
b) any additional fees or charges, including those charged by the debt
management firm; and
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c) any fee, commission or monetary benefit receivable by the debt
management firm from a third party.
13.16 A debt management firm must clearly explain to the consumer what steps the
consumer must take in order to undertake the recommended course of action,
including whether the assistance of a third party will be required, the nature of
that assistance and the likely cost (where known).
13.17 Following compliance with Provisions 13.14 to 13.16 above, a debt
management firm must provide the consumer on paper or another durable
medium with details of the charges payable to date to the debt management
firm.
NEGOTIATION
13.18 Where a debt management firm has provided a statement of advice to a
consumer as required under Provision 13.14, and before undertaking any
actions outlined in that statement, a debt management firm must:
a) allow the consumer at least five business days to consider the statement;
and
b) ensure that the consumer has signed an agreement in accordance with
Provision 13.2 in relation to those actions.
13.19 A debt management firm may begin negotiations with a consumer’s creditors
only when the five business day period in Provision 13.18 (a) has expired and it
has received the consumer’s consent to do so, and must retain a record of the
consumer’s consent. Such negotiations must take place without delay.
13.20 a) A debt management firm must provide to a consumer, on paper or another
durable medium, a notification of the outcome of negotiations with creditors
within three business days of such outcome. However, such notification must
take place without delay where the creditor has imposed a shorter timeframe
for acceptance of a negotiated outcome.
b) This notification must:
i) highlight any variations from the proposed course of action outlined in
Provision 13.14 and set out the reasons why the negotiated outcome
is considered to be suitable and affordable for that consumer;
ii) include details of the steps that the consumer must take in order to
comply with the terms negotiated with creditor(s) and the timeline
imposed by the creditor(s) for complying with these steps;
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iii) include details of the circumstances in which the consumer can
withdraw from the new arrangements and the steps required to
withdraw from the new arrangements;
iv) include details of the circumstances under which any cancellation
charges may become payable by the consumer;
v) include details of any penalties that may be applied by creditors if the
consumer fails to meet the terms of the new arrangements; and
vi) include details of creditor(s) that have declined to engage with the
debt management firm.
13.21 A debt management firm must not agree to a negotiated outcome with a
consumer’s creditor(s) without the prior written agreement of the consumer
and must retain a record of the consumer’s agreement.
13.22 While negotiations with creditors on behalf of a consumer are ongoing, a debt
management firm must provide an update to the consumer, at least on a
monthly basis, on the status of the negotiations. The debt management firm
must provide these updates until the process of negotiation is completed.
STATEMENTS
13.23 Where a debt management firm provides debt management services to a
consumer over a period longer than six months, the debt management firm
must provide to the consumer a statement, on paper or another durable
medium, at least every six months, which must include, where relevant:
a) details of the activities completed by the debt management firm over the
six month period to which the statement relates; and
b) fees charged over the six month period to which the statement relates.
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APPENDIX A
KEY FEATURES DOCUMENT FOR TRACKER BONDS
HOW DOES THE XXXX (INSERT NAME) TRACKER BOND WORK?
This section must include:
the name and address of the product producer(s);
a brief description of the benefits promised by the tracker bond to the consumer,
including the promised payment which applies. The compound annual rate
equivalent of the promised payment, related to the total investment amount,
must be shown;
if there is a risk that the consumer may lose some or all of the money invested, a
statement of this risk;
if there is a risk that the consumer will not achieve the estimated or anticipated
return on his or her investment, a statement of this risk;
if averaging and/or any lock-in provisions can impact negatively on the promised
benefits, as compared with an identical investment without such benefits, the way
in which such an averaging or lock-in provision can lead to reduced return on his
or her investment (which must be disclosed prominently);
whether or not the tracker bond will benefit from dividends payable on the
underlying shares; if the tracker bond will benefit from such dividends, a clear
statement of the extent to which the tracker bond will benefit; if the tracker bond
will not benefit from such dividends, a clear statement that the tracker bond is
suitable only as a capital growth investment;
if the relevant credit institution or insurance undertaking benefits from any
dividend or interest income arising from the investment used to secure the cash
bonus promised to the consumer, a statement of this fact;
if there is any currency risk, interest rate risk and/or price volatility risk to the
consumer, in relation to the benefits promised, a statement of this risk;
the period to the date of the promised payment;
if the tracker bond is guaranteed, the level, nature, extent and limitations of the
guarantee and the name of the guarantor; and
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if the tracker bond involves leveraging, a statement of the effects.
WHERE DOES MY INVESTMENT GO?
This section must show clearly the split of the investment amount (or a typical
investment amount for this type of product if the disclosure is being made on a
provisional or generic basis) into three components:
1 the open market value, at the date of investment, of the payment promised to the
consumer;
2 the open market value, at the date of investment, of the cash bonus promised to
the consumer; and
3 charges representing the balance.
The implied compound annual rate of the amount promised to the consumer, relative
to the total investment amount, should also be stated prominently.
The disclosure should take the following format:
Your proposed investment of €xx,xxx will be used, at the date of investment, as follows :
€xx,xxx , or xx%, will be used to secure the promised payment of €xx,xxx payable
after yy years and mm months. This is equivalent to a promised return on
this part of your investment of xx% pa, before tax is deducted.
€xx,xxx , or xx%, will be used to secure the cash bonus which may be payable after
yy years and mm months.
€xx,xxx, or xx%, will be taken in charges. If applicable, intermediary remuneration
must be disclosed in this section.
€xx,xxx Total
If the cash bonus is zero, the promised payment will represent a return of x.x% pa, on your
total investment over the period to the date of the promised payment, before any tax is
deducted.
Where relevant, insert an explanation that the consumer’s return on his or her investment
will be capped/limited. This explanation should clearly set out that the excess of any
earnings over the cap/limit will be retained by the product producer and / or a third party.
The open market value referred to above is the open market cost of the benefit promised
to the consumer at the date of investment, net of the value of any commission or other
reward or benefit payable to the credit institution or insurance undertaking and/or a
connected party to that credit institution or insurance undertaking.
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DO I HAVE ACCESS TO MY INVESTMENT?
In this section, the consumer must be informed of the limited nature of the promised
payment, e.g. that it is payable on one specified date only.
This section must also include:
whether or not the consumer can get access to part or all of their investment,
before the date of the promised payment;
if access is provided before this date, whether the encashment will be on
promised terms or not; and
whether or not the consumer is likely to suffer a penalty or financial loss if access
is provided to part or all of their investment, before the date of the promised
payment.
WHAT HAPPENS IF I DIE BEFORE THE TRACKER BOND MATURES?
This section must include:
the circumstances, if any, in which the tracker bond may or must be encashed on
death and the procedure for encashing it on death, if this is allowed; and
the benefit payable on encashment of the tracker bond on death, when this
benefit is payable, how this benefit is calculated, and whether there is any
promised level of benefit payable on death.
WHAT ABOUT TAX?
This section must include:
the tax that may be deductible by the regulated entity from benefits payable;
the circumstances, if any, in which the tax referred to above, may not be
deductible from the benefits payable;
a general statement that a consumer should satisfy themselves in relation to
revenue reporting requirements and the implications of non-disclosure where
required.
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APPENDIX B
PRSA (PERSONAL RETIREMENT SAVINGS ACCOUNT)
WHAT IS A PRSA?
A PRSA is a way of helping people provide for their retirement by saving now. It is a long-
term investment product sold by financial institutions and intermediaries. It allows you
to create a pension fund for yourself when you retire; you can vary the amount you pay
into it over time and, if you change employment, you can continue to use the same PRSA.
You can switch from one PRSA to another at any time free of charge.
Types of PRSA:
There are two types of PRSA:
Standard PRSA – where the charges you have to pay are capped i.e. there is a
maximum level of charges allowed and where there are certain investment
restrictions on how your money is invested.
Non-Standard PRSA – where there is no maximum level of charges and there
are fewer investment restrictions.
DO YOU NEED A PRSA?
To see if you need a PRSA you should ask yourself some questions:
Can you join an existing pension scheme in your job? You should find out if there
is a good scheme available to you through your job. If not, you will need to
consider making provision for your retirement and should consider a PRSA. If you
already have good pension arrangements you may not need to make any additional
provisions or you may be able to top-up your benefits through making Additional
Voluntary Contributions (AVCs).
What if you are in a Defined Benefit Scheme? If you have a defined benefit
pension scheme – a pension related to your salary, for example, two thirds of final
salary on retirement – you may not need to make any further pension provisions or
you may already have a facility to make additional voluntary contributions (AVCs).
Transferring from a defined benefit scheme into a PRSA involves a risk and should
only be done after very careful assessment of your financial position and the
advantages/disadvantages for you – you will be foregoing a defined salary related
pension in retirement for an uncertain income.
What if you are in a Defined Contribution Scheme? If you are in a defined
contribution scheme you are already carrying the investment risk – your pension
will depend on the contributions you make together with the investment
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performance of your fund less the charges involved. But your employer may be
making a contribution to the Scheme – would this contribution continue if you
transferred into a PRSA?
Should you start a PRSA if you already have a Personal Pension Plan? You will
need to take professional advice based on your personal circumstances.
WHAT TYPE OF PRSA IS BEST FOR YOU?
A Standard PRSA is likely to meet the requirements of most people. You cannot be
charged more than the maximum level of charges allowed (5% of contributions paid and
1% per year of the PRSA assets).
The level of charges is very important. Charges reduce the fund you can build up. The
size of your fund on retirement will depend on your contributions and the Investment
performance less the charges deducted. Investment performance cannot be predicted,
but higher charges are just like a weight handicap in a horse race – creating a need to
produce a better investment performance just to remain level with products carrying
lower charges.
Charges on Non-Standard PRSAs are not capped and, in most cases, may be higher than
on Standard PRSAs.
A second difference between Standard and Non-Standard PRSAs is in the way in which
your money is invested. A Standard PRSA invests only in pooled funds, where the risk is
spread across a large number and type of investments. A Non-Standard PRSA can offer
you a wider investment choice. If a Non-Standard PRSA is offered to you on the basis of
the investment choice it gives you, you need to be sure that you understand the
investment choices, and that you understand why you need them. This is your pension,
your income in your retirement years. If you do not understand how your pension will be
invested then perhaps you should consider again if this particular product is the one for
you.
You should keep the level of your contributions and the investment performance of your
PRSA under regular review, so you can see if your PRSA will provide you with the pension
you need.
BUYER BEWARE – WHAT TO LOOK OUT FOR
Where a Non-Standard PRSA is being offered or recommended to you, make sure you
understand the differences between this product and a Standard PRSA, in particular the
charges and investment choices of each product.
Beware of suggestions of better returns on Non-Standard PRSAs. Predicting investment
performance is notoriously difficult.
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Beware if it is suggested to you, or you are advised, to abandon an existing pension plan
in favour of a new PRSA. Make sure that you understand the reasons why this would be
the best course of action for you.
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APPENDIX C
NON STANDARD PERSONAL RETIREMENT SAVINGS ACCOUNT
DECLARATION
TO BE COMPLETED BY THE VENDOR (WHETHER PRODUCT PRODUCER OR
INTERMEDIARY).
Name of Consumer to whom a non-Standard PRSA has been offered or recommended:
(Print name in block capital letters)
Name of Non-Standard PRSA offered to the Consumer:
Name of Non-Standard PRSA Product Producer:
a) I declare that I have explained to this consumer that there are differences
between a Non-Standard PRSA and Standard PRSA, and focused on the fact
that the charges may be higher and the investment risks are greater for this
non-Standard PRSA.
b) I declare that in my opinion it is in the best interest of the above named
consumer to purchase this non-Standard PRSA.
c) I declare that in my opinion the non-Standard PRSA I have
offered/recommended to the above named consumer is the PRSA product
most suited to this consumer from among all those I am able to provide.
Signature of Salesperson:
Name of Salesperson (in block capitals):
Position Held:
Name of Regulated Entity:
Date of completion of the declaration:
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APPENDIX D
INFORMATION TO BE PROVIDED TO CONSUMER [PURSUANT TO PROVISION
13.1]
The following information, which is to be communicated to a consumer before entering
into a contract for the provision of debt management services, must be provided in a
clear and accurate manner and on paper or on another durable medium. The title must
appear prominently at the top of the first page of the document followed by the
explanatory statements.
WHAT YOU SHOULD KNOW ABOUT DEBT MANAGEMENT SERVICES
This document provides you with key information about debt management services. It is
not marketing material. The information is required to help you understand the nature of
this service and the risks of using the service. You are advised to read it so that you can
take an informed decision about whether debt management services are suitable for your
personal circumstances.
WE WILL CHARGE YOU FOR OUR SERVICES BUT THERE ARE SOURCES OF FREE DEBT
ADVICE AND SERVICES
The Money Advice and Budgeting Service (MABS) offers free advice for people in debt, or
in danger of getting into debt, in Ireland.
MABS can be contacted at its Helpline (0761 07 2000) which operates Monday to Friday
[Insert times that MABS are available] or by email at: [email protected]
MABS has over 60 offices nationwide. For details of your nearest office, visit the Contact
MABS area of its website at: www.mabs.ie
OUR SERVICE COMMITMENT TO YOU
[Insert if relevant: WE CANNOT MAKE PAYMENTS TO YOUR CREDITORS ON YOUR
BEHALF
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We are not authorised to hold your funds or make payments on your behalf. If an
arrangement is agreed with your creditor(s), it will be your responsibility to make the
revised payments to the creditors].
YOU WILL KNOW THE TOTAL COST TO YOU OF ANY FEES AND CHARGES ASSOCIATED
WITH THE SERVICE
Our fee and charges will be applied as follows:
[Insert details of the basis on which fees and charges will be calculated and on the precise
services that will be provided for each of those fees and charges]
YOUR ADVISOR WILL GO THROUGH A FULL FINANCIAL ASSESSMENT PROCESS WITH
YOU WHICH WILL COVER ALL THE OPTIONS FOR DEALING WITH YOUR DEBT
Your advisor will use a standard financial statement to obtain financial information from
you.
You must ensure that all information about your personal and financial circumstances
which you supply as part of the financial assessment is accurate.
Your advisor will consider the debt management options available to you.
YOU WILL RECEIVE A STATEMENT OF ADVICE
This statement of advice will provide you with details of a proposed course of action for
you and explain why this proposed course of action is suitable and affordable for you.
How the proposed options work as well as any actual or potential consequences of the
proposed course of action will be explained to you in the statement of advice.
OTHER INFORMATION YOU SHOULD BE AWARE OF
You may be responsible for undertaking the actions proposed and you may engage a
third party to assist you.
Your creditors are not obliged to accept reduced repayments or freeze interest or
charges.
Your creditors’ collection activities may continue even though you have engaged a
debt management firm.
93
If you cancel payments to your creditors, you will be in breach of your agreement with
them and your account(s) will go into arrears or further into arrears.
If you reduce your payments it may mean it takes longer to pay off your creditors and
you may pay more than if you paid over a shorter term.
If you undertake a proposed course of action it may affect your credit rating, which
may limit your ability to access credit in the future.
If you are a property owner, as part of any arrangement, you may be required to sell
or re-mortgage your property to pay off some or all of your debts. Your ability to do
so may be restricted and a mortgage may only be offered at a higher interest rate.
If you are a property owner, failure to make the negotiated payments to creditors
could result in you losing your home.
IF YOU WANT TO STOP USING OUR SERVICES AT ANY STAGE YOU MAY DO SO
If you wish to stop using our services, you can notify the firm that this is the case.
If you stop using our services, any outstanding charges will be payable as follows:
[Insert a description of how any outstanding charges for services provided will be dealt
with if the consumer ceases using the service]
IF YOU ARE NOT HAPPY WITH THE SERVICE YOU RECEIVE FROM US, YOU HAVE THE
RIGHT TO COMPLAIN
If you are not happy with the services we provide to you, you have the right to make a
complaint to us. This will be handled in accordance with our complaints handling process.
If your complaint is not resolved to your satisfaction, you have the right to refer your
complaint to:
The Financial Services Ombudsman’s Bureau,
3rd Floor, Lincoln House, Lincoln Place, Dublin 2.
Telephone: 1890 88 20 90 or 01 662 0899
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APPENDIX E
STANDARD FINANCIAL STATEMENT
Section A: Account & Borrower Details
Borrower Information:
Borrower 1
Borrower 2
A1
Name
A2
Mortgage Account Reference No (s)
A3
Outstanding Mortgage Balance (€)
A4
Estimated Current Value of Primary Residence (€)
A5
Monthly Mortgage Repayments Due (€)
A6
Correspondence Address
A7
Property Address
if different to correspondence Address
Please indicate
preferred contact
method
A8
Home Telephone
A9
Mobile
A10
Work Telephone
A11
E-mail
A12
Marital Status
A13
Date of birth
DD/MM/YYYY
DD/MM/YYYY
A14
No. and age of dependent children
Child1
Child 2
Child 3
Child 4
A15
Total number in household
A16
Employed Y/N; if self-employed give details
A17
Occupation (if unemployed give previous occupation)
A18
In Permanent employment Y/N
A19
Name of Employer & Length of Service
A20
Reason(s) for Review/Arrears
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1
Do not include any deductions made from your salary at source (e.g., pension
contribution, health insurance etc.) anywhere else on this form.
Section B: Your Monthly Income
Borrower 1
Borrower 2
TOTAL
B1
Gross Monthly Salary (before tax
and any other deductions at source)
B2
Net Monthly Salary (after tax and
any other deductions at source)
1
B3
Monthly Social Welfare Benefits
Please list
B3 (a)
Benefit-
B3 (b)
Benefit-
B3 (c)
Benefit-
B4
Child Benefit
B5
Mortgage Interest Supplement
B6
Family Income Support
B7
Maintenance
B8
Other, e.g. Pension, room rent,
grants (Please Specify)
B9
Monthly Income from Property
assets (other than primary
residence) (see E5)
B10
Monthly income from non-property
assets (see F8)
B11
Total Monthly Income
(sum of B2 to B10)
G1
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2
Average charge calculated by totalling last three utility bills and dividing by the number of months to get the
average monthly cost.
3
Please identify if these bills are bundled.
4
Medical expenses include dentist, optician and any other costs related to health.
5
Do not include if Health Insurance is deducted from your wages at source,( i.e., if it has already been
deducted from B2)
Section C: Monthly Household Expenditure
Average Charge
2
Arrears
(where
applicable)
Utilities
C1
Electricity
C2
Gas /Oil
C3
Phone (Landline & Internet)
3
C4
TV/Cable
3
C5
Mobile Phone
C6
Refuse Charges
C7
TV Licence
Household
C8
Childcare
C9
Elderly care (e.g., carer, nursing home fees etc)
C10
Food/Housekeeping/Personal Care
C11
Clothing and Footwear
C12
Household Repairs/Maintenance
Transport Costs
C13
Petrol
C14
Motor Insurance /Tax/NCT
C15
Rail/Bus/Taxi Costs (including school transport costs for children)
C16
Car Maintenance/Repairs
C17
Car Parking and Tolls
Primary Residence Mortgage-related Costs
C18
Mortgage Protection/Endowment Premium
C19
Payment Protection
C20
House Insurance
Education
C21
Books
C22
School/ College Fees
C23
Uniforms
C24
Extra Curricular activities (e.g. school outings)
C25
Other (e.g. voluntary contributions)
Medical
C26
Medical Expenses and Prescription Charges
4
C27
Health Insurance
5
Social
C28
Lifestyle Expenses (e.g., family events, Christmas, Birthdays, eating out etc.)
C29
Club membership
C30
Other - please specify
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+
6
Do not include if Pension Contribution is deducted from your wages at source,( i.e., if it has already been
deducted from B2)
Average
Charge
Arrears (where
applicable)
Other
C31
Life Assurance
C32
Pension Contribution
6
C33
Maintenance paid to spouse/child (if applicable)
C34
Rent
C35 (a)
Property Service/Management Charges
C35 (b)
Other - please specify
C35 (c)
Other - please specify
C36
Monthly expenditure on property assets (see E5)
C37
Monthly Savings
C38
Total Monthly Expenditure (sum of C1
to C37)
G2
Please provide details of any steps you propose to take to reduce your monthly expenditure
and the savings you expect to achieve:
Please provide details of any steps you have already taken to reduce your monthly
expenditure and the savings you have achieved:
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7
e.g., fines, instalment orders, judgements
Section D: Your Current Monthly Debt Payments
Debt Type
Monthly Repayments
Remaining
Term
Total
Outstanding
Balance €
Arrears
Balance
€
Lender
Purpose
of Loan
Secured?
Y/N
Currently
Restructured?
Y/N
Payment
Protection
Insurance
Y/N
Due €
Being Paid €
D1
Mortgage for Primary
Residence
G4
D2
Court Mandated Debt
(Please Specify)
7
D3
Court Mandated Debt
D4
Credit Union
D5
Credit Union
D6
Overdraft
D7
Hire Purchase
D8
Store Card
D9
Catalogue Debt
D10
Credit Card 1
D11
Credit Card 2
D12
Credit Card 3
D13
Personal Loan 1
(please specify)
D14
Personal Loan 2
(Please specify)
D15
Personal Loan 3
(please specify)
99
Debt Type
Monthly Repayments
Remaining
Term
Total
Outstanding
Balance €
Arrear
s
Balanc
e €
Lender
Purpose
of Loan
Secured?
Y/N
Currently
Restructured?
Y/N
Payment
protection
Insurance Y/N
Due €
Being Paid €
D16
Loans from
family/friends
D17
Mortgage Debt on
property other than
primary residence
(see E5)
D18
Other Debt (please
specify)
D19
Other Debt
D20
D21
D22
Total (sum of
D2 to D21)
G5
100
Property Assets (other than Primary Residence)
Property
Address
Date of Purchase
1
2
3
4
8
For example, sole or joint ownership. Where a property/premises is not 100% owned by customer(s), please state the % amount that is
owned
9
Please provide a reasonable estimate of the current value of these assets.
Section E: Property Assets (other than Primary Residence)
Property
(give details
below)
Property
Type (e.g.
Buy to let)
Owner-
ship
Type
8
Current
Value
(est)
9
€
Loan
Balance €
Arrears
Balance €
Monthly
Rental
Income €
Monthly
Expenditure (e.g.,
upkeep,
maintenance)
Re-
structured
Y/N
Monthly Mortgage Payments
Lender
For
Sale
Y/N
Due €
Being Paid €
E1
1
E2
2
E3
3
E4
4
E5
Total
B9
C36
D17
MONTHLY INCOME AND EXPENDITURES RELATED TO PROPERTY ASSETS SHOULD
ALSO BE INCLUDED IN SECTIONS B AND C RESPECTIVELY
MONTHLY MORTGAGE REPAYMENTS RELATING TO PROPERTY ASSETS SHOULD BE
INCLUDED IN SECTION D
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Please list all other liabilities, for example any guarantees given with respect to company borrowing or borrowing by a family member.
Section F: Non-Property Assets
Asset Type
Original Cost/
Value(€)
Current
Estimated Value €
Net Monthly
Income
Please Give Any Relevant Details
F1
Savings/deposits/current account
F2
Shares
F3
Motor Vehicle (s)
F4
Redundancy Payment(s)
F5
Long-term investment (s)
F6
Other investment(s)
F7
Other Assets (e.g., stock, machinery
etc)
F8
Total (sum of F1 to F7)
B
10
Please provide any other information which you believe to be relevant to above:
102
I/we understand that the information provided will only be used for the purpose of assisting my debt management
firm to assess my financial situation.
Protecting Your Information
“Your Debt Management Firm will keep your information confidential and will only use this information for the purpose of
providing debt management services to you and in accordance with your Debt Management Firm’s obligations under the
Data Protection Acts 1988 and 2003. For more information on your rights under the Data Protection Acts, see the Data
Protection Commissioner’s website at www.dataprotection.ie”
I/we declare that the information I/we have provided represents my/our financial situation.
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Section G: Financial Statement Summary (for office use only)
G1
Total Monthly Income (B11)
G2
Less Total Monthly Expenditure (C38
( )
G3
Sub-Total (G1 minus G2)
G4
Less Mortgage Repayments Due (D1)
( )
G5
Less Other Monthly Debt Due (D22)
( )
G6
Total Surplus/Deficit (subtract G4 and G5 from G3)
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T
+353 1 224 6000
F
+353 1 224 6561 www.centralbank.ie code@centralbank.ie
Bosca PO 559, Sráid an Dáma, Baile Átha Cliath 2, Éire
PO. Box No 559, Dame Street, Dublin 2, Ireland
