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As the date for the implementation of the anticipately awaited Central Bank revised Consumer Protection Code approaches, Charlie Weston spoke to Compliance Institute CEO Michael Kavanagh on what the new rules will mean in practice.
Irish Independent - What new financial rules coming next month will mean for vulnerable customers and auto-renewal plans
New rules for financial firms, which experts say should better protect consumers, will be introduced next month.
From March 24, there will be a ban on auto-renewal of a wide range of insurance, including for travel and gadgets.
Mortgage switching should also get easier, because lenders will have to provide title deeds to a borrower within 10 days of a request. Additionally, stronger rules are coming in for customers in vulnerable circumstances.
These rules are part of the Central Bank’s revised Consumer Protection Code (CPC).
Chief executive of the Compliance Institute, Michael Kavanagh, said the ultimate aim of the new code is to protect consumers of financial products today and in the future.
The professional body for compliance professionals said the updated CPC will put a ban in place for the auto-renewal of travel, gadget, dental and pet insurance.
“Under the new CPC, consumers will no longer have their policies for travel insurance, gadget insurance, dental insurance or pet insurance automatically renewed unless they have provided their explicit consent for the automatic renewal in advance,” Mr Kavanagh said.
He added that the change was being introduced to reduce the risk of consumers paying for products they no longer need or that would not be suitable for them.
Another reason for the change is to reduce the risk of consumers missing out on opportunities to shop around to find the most suitable or cost-effective product.
The new opt-in rules around automatic renewals will not apply to all types of insurance products. Health insurance, home insurance and car insurance will be exempt.
Consumers could be at a substantial disadvantage if they do not renew their policy in time and their policies lapse as a result, Mr Kavanagh said.
Rules that affect mortgage switchers are also being updated.
This will be particularly helpful to those switching mortgage
Under the new rules, lenders will need to provide title deeds to a borrower, or their representative, within 10 working days of the request, subject to certain exceptions.
“This will be particularly helpful to those switching mortgage,” Mr Kavanagh said.
“As the time currently taken by some lenders to release title deeds to mortgage switchers can lead to unnecessary delays, this requirement should help speed up the mortgage switching process.
Meanwhile, the revised code has changes on how financial institutions must deal with consumers in vulnerable circumstances.
This includes bank customers who might find it difficult to manage their finances, including customers who have a disability or English as a second language.
The revised code includes a requirement that – where a customer wishes to do so – firms should allow the customer to provide contact information for a trusted person who the firm may communicate with, including in situations where financial abuse, including fraud, is suspected.
Under the updated CPC, there will also be new advertising rules to prevent greenwashing.
There is a new requirement for financial services firms to ensure that their advertising does not mislead customers on a product or service’s sustainability, the “green credentials” of the firm itself or its business model.