Central Bank has major questions to answer over failure to enforce consumer protection code
13 November 2020
- Central Bank has not done a single enforcement action for a breach of the Consumer Protection Code in over 4 years, outside of the Tracker Scandal.
- From 2006 to 2016, the Central Bank completed 26 enforcement actions for breaches of the Code, with numbers falling off a cliff after this.
- Consumer Protection Code is the single most important protection which consumers have and applies to over 10,000 regulated firms.
Labour Finance spokesperson Ged Nash has revealed that over the past 4 years the Central Bank has not done a single enforcement action for a breach of its own Consumer Protection Code outside of the Tracker Mortgage Scandal, despite the Code applying to over 10,000 firms.
The revelation comes at a time when there are major questions over the treatment of consumers by banks and insurance firms in relation to dual pricing, rocketing car insurance and some of the highest mortgage rates in Europe.
The Consumer Protection Code is the single most important protection which consumers have when dealing with financial services firms. From 2006 to 2016, the Central Bank completed 26 enforcement actions for breaches of the Consumer Protection Code.
Deputy Nash said:
“This is simply scandalous. From the response to my parliamentary question, it is clear that besides the Tracker Examination, the Central Bank has not fined any company or firm in financial services for a breach of the Consumer Protection Code in over four years, despite major questions about the way banks and insurers are treating consumers across a whole range of issues, from dual pricing to rocketing car insurance to some of the highest mortgages in Europe.
“The Consumer Protection Code is supposed to be the document that protects consumers from being treated unfairly by financial services firms, and now we learn that the Central Bank has stopped enforcing any breaches of that Code, despite the fact that it regulates over 10,000 firms.
“I find it hard to believe that not one of those firms breached the Consumer Protection Code in the past 4 years, especially as the Central Bank issued 26 fines in the 10 years to 2016. The number of fines dropped off a cliff after that for some reason, which means that either the Central Bank is turning a blind eye to misbehaviour, or else they do not know what is going on.
He continued;
“It is not as if there has not been controversy over how consumers have been treated by banks and insurers in recent years. We have seen questions about issues such as dual pricing, car insurance increasing by over 60% when costs for insurers only went up by 14%, a preliminary finding by the CCPC of alleged cartel-like behaviour among insurance firms and some of the highest mortgage rates in Europe. Is the Central Bank seriously saying that it has found nothing among the 10,000 firms it regulates for compliance with the Code that warranted a sanction?”
“This country still bears the scars from the misbehaviour of bankers that led to our last financial crisis, so you would think that the financial regulator would have learned its lessons from what happens when you let bankers do as they please. The staffing levels of the Central Bank have increased substantially in recent years, so questions need to be asked about how this has come about, and whether this is down to resources or culture at the Central Bank. Either way, the Central Bank has major questions to answer here.”