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Consumer Protection

Dáil Éireann Debate, Wednesday - 11 November 2020

Wednesday, 11 November 2020

Questions (69)

Gerald Nash

Question:

69. Deputy Ged Nash asked the Minister for Finance the reason the Central Bank has ceased to enforce the consumer protection code, as evidenced by the fact that the Central Bank conducted 26 enforcement actions for breaches of the code between July 2006 and July 2016 but since July 2016 has not conducted a single enforcement action for a breach of the code aside from enforcement actions related to the tracker mortgage scandal; and if he will make a statement on the matter. [35552/20]

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Written answers

The Central Bank has advised me that it continues to give focus to the Consumer Protection Codes in both its supervisory and enforcement work.

The Central Bank has clearly articulated its expectation that firms should at all times, act in the best interests of customers, the key tenet of the Consumer Protection Code. It continues to monitor all firms through intrusive and robust supervision, challenging boards and executive management.

The Central Bank intervenes, within the scope of its regulatory mandate, to ensure the interests of consumers are protected by focusing on the issues, which pose the greatest potential or actual risk of consumer harm. Its targeted interventions are aimed at addressing widespread issues that affect many customers.

In addition to enforcement actions such as Administrative Sanctions, the Central Bank uses a wide range of other tools to take action against regulated entities, which fall short of its expected standards of behaviour. These include ensuring that firms and individuals seeking to access the market meet high regulatory standards, requiring firms to have robust risk management processes in place to address all risks to consumers, directing firms to put things right when they have made errors or caused consumer harm and making sure firms compensate consumers for losses due to misconduct.

The Central Bank has assured me that it will not shy away from undertaking robust and intrusive enforcement investigations where necessary if firms fail to reach the expected standards and their actions pose a risk to consumers.

The Tracker Mortgage Examination (the “TME”) was the largest and most complex piece of supervisory work and remediation scheme ever undertaken by the Central Bank. The findings of the TME have fed into its enforcement investigations which have run in parallel with that. Those investigations are considering potential breaches of the Consumer Protection Codes. The Central Bank investigation of these matters have been robust, intrusive and forensic in nature.

To date, arising from these investigations, the Central Bank has concluded 2 investigations imposing record fines on PTSB (€21million in May 2019) and KBC (€18.3million in 2020), for breaches of the Consumer Protection Codes. The level of fines imposed reflect the gravity with which the Central Bank views the breaches of the Consumer Protection Codes. There are a number of ongoing tracker related investigations which are also investigating breaches of the Consumer Protection Codes.

One of the Central Bank's aims in taking enforcement actions is to play a part in changing the culture within the financial services industry. The fines imposed arising from the tracker investigations will act as a strong deterrent to all regulated entities and not just those operating within one sector – the Central Bank takes its dual mandate seriously and will act where entities breach not only prudential requirements but also where they fail to provide the protections of the Consumer Protection Codes to their customers.

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