Dáil Éireann Debate, Tuesday - 6 February 2018
140. Deputy Pearse Doherty asked the Minister for Finance the action he is taking or has taken to ensure returning emigrants are not disadvantaged in areas such as, but not limited to, the provision of motor insurance and unreasonable demands for paperwork that emigrants typically do not possess on the opening of a bank account or applying for a mortgage; and if he will make a statement on the matter. [5705/18]
Amharc ar fhreagraThe issues raised by Deputy are quite distinct therefore I will respond to the insurance part of the question first and then address the bank account and mortgage part of the question.
In relation to the issue of motor insurance for returning emigrants, Recommendation 6 of the Report on the Cost of Motor Insurance aims to address the problems faced by those returning to Ireland. Pursuant to this recommendation, a protocol has been agreed between the Department and Insurance Ireland under which insurance companies have committed to accepting the driving experience of returning emigrants gained while abroad, when the driver has previous driving experience in Ireland. The guiding principle of the protocol is to ensure that a returning emigrant is not treated any differently to any other driver subject to their ability to demonstrate, and the insurance company to verify, their continued driving experience and the normal acceptance criteria of the company. What this means is that the returning emigrant will not be disadvantaged from spending that time abroad. Furthermore, under the protocol insurance companies will not distinguish between countries on the basis of which side of the road driving takes place therein.
In addition to the above, insurance companies have agreed to provide relevant and helpful information on their websites to make it easier for consumers to understand the implications of their move abroad from a motor insurance perspective. As part of this exercise they will outline what people need to do under a number of different circumstances depending on the length of time they intend being away from Ireland.
Insurance Ireland submitted a report on the implementation of this recommendation to the Department of Finance on 22 December 2017. This report confirmed that Insurance Ireland members have agreed to publish the wording of the agreed protocol on their company websites and any other forms of social media, in addition to providing training for staff who can work through issues with emigrants before they leave, whilst they are out of the country and when they return to Ireland. The stated intention is “to resolve any issues well before they arise and for the consumer to be aware of the considerations when moving abroad”. The wording of the agreed protocol is also available on the Insurance Ireland website.
Insurance Ireland's report also outlines some sample cases which demonstrate how the rolling-out of the protocol has already led to disputed cases being resolved to the benefit of returning emigrants, and provides figures indicating that the number of such cases being processed under the Declined Cases Agreement is decreasing.
If however, a returning emigrant is continuing to have difficulty in obtaining insurance, Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance. The relevant contact details are: feedback@insuranceireland.eu or declined@insuranceireland.eu or 01-6761914.
In relation to opening bank accounts, the Payments Accounts Directive was transposed into Irish law on 18 September 2016. In Ireland, all banks offering payment accounts are required to offer an account with basic features free of charge for at least one year to consumers who do not already have a bank account.
These basic features include:
- An ATM card
- Direct debits
- Ability to pay for goods and services online
It is a matter of good commercial practice that any firm should know its customers. It is particularly important that a financial institution confirms the identity of their customers because financial institutions often undertake high value transactions on behalf of their customers. In addition, EU directives require that financial institutions ascertain the identities of their customer in order to prevent the use of the financial system for the purpose of money laundering and terrorist financing.
Section 33 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended, sets out the requirements in relation to customer due diligence ('CDD'). Pursuant to section 33, designated persons are required to identify the customer and verify the customer's identity on the basis of documents (whether or not in electronic form) or information, that the designated person has reasonable grounds to believe can be relied upon to confirm the identity of the customer. The Central Bank does not prescribe what documents or information designated persons should obtain from a customer in order to satisfy the requirements of section 33. This is a matter for each designated person to determine.
General Principle 2.11 of the Consumer Protection Code 2012 (the CPC) provides that '[a] regulated entity must ensure that in all its dealings with customers and within the context of its authorisation it: 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'.
Guidelines on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing are available on my Department's website at http://www.finance.gov.ie/wp-content/uploads/2017/05/Criminaljustice2012.pdf . Appendix 2 of these guidelines is a non-exhaustive and non-mandatory list of alternative documents that can be used to verify identity in circumstances where a prospective customer cannot, for justifiable reasons, meet the standard identification and verification requirements, or has experienced difficulties in the past when seeking to open accounts. If an individual has difficulty with a bank, I would advise them to examine this list to see how they can meet identification requirements and then approach the financial institution again.
If the consumer is not satisfied with the financial service provider’s decision(s) to refuse the provision of services (including a refusal to provide a bank account or a mortgage), they can make a complaint, using the bank’s internal formal complaints procedure. If the consumer is not satisfied with the outcome of the complaint, they may wish to refer the matter to the Financial Services and Pensions Ombudsman to have it independently investigated. Contact details are as follows:
Office of the Financial Services and Pensions Ombudsman, 3rd Floor, Lincoln House, Lincoln Place, Dublin 2 Locall: 1890 88 20 90; Email: info@fspo.ie; Website: www.fspo.ie .
Regarding mortgages, there are a number of statutory and regulatory provisions in place governing the provision of such loans to consumer borrowers. These include the European Union (Consumer Mortgage Credit Agreements) Regulations 2016, the Central Bank Consumer Protection Code and the Central Bank macro-prudential rules for residential mortgage lending. When taken together these require lenders to, inter alia, carry out a credit worthiness assessment (and for that purpose lenders will be required to gather relevant information about a borrower’s personal circumstances and financial situation such as information on the borrower’s income, expenses, assets, debts, employment status, known future change in circumstances etc.), and to offer mortgage credit only where the results of the assessment indicates that the borrower is likely to be in a position to meet the terms of the proposed credit agreement. In addition, subject to a limited discretion available to lenders, the maximum amount of residential mortgage credit lenders will be in a position to provide in any individual case will have a regard to the value of the residential property which will act as security for the loan and the income of the borrower(s). Other than the requirements which apply to the provision of residential mortgage credit generally, it should be noted that there are no Central Bank regulatory provisions which specifically prevent or restrict the ability of a lender to provide mortgage credit to recently returned residents. However, it should also be noted that, subject to complying with all relevant legal and regulatory requirements, it remains a commercial matter for each lender to determine its overall lending policies and to make its own underwriting decisions on individual loan applications.
