Central Bank to publish revised protection code
The Central Bank will publish a revised Consumer Protection Code (CPC) in Q1, bringing about significant changes for firms.
Key revisions include:
- Focus on digitisation,
- Preventing financial abuse,
- Protecting vulnerable customers, and,
- Tighter compliance timelines.
Readiness
Mason Hayes and Curran (MHC) has set out steps for firms to ensure readiness.
The revised Consumer Protection Code is significantly more complex and detailed than the 2012 version.
A mapping tool has been provided to help firms identify differences, but firms must be cautious, as some new rules don’t have direct predecessors, requiring entirely new processes.
These include firms’ responsibilities to prevent financial abuse, and specific rules relating to digitisation.
“Mechanical use of this mapping tool could give firms a false sense of security, and firms need to be careful when using it,” MHC has said.
Notable change
MHC points to a notable change in the timeline for decisions on insurance claims, from ten days (under the current code) to five under the new regulations.
The new Standards for Business Regulations (SfBR) will include high-level conduct standards similar to Britain’s Financial Conduct Authority handbook principles for business.
Firms must adhere to these principles, with violations potentially leading to Central Bank sanctions and accountability inquiries.
MHC notes that this will necessitate a re-evaluation of existing policies and procedures.
The new regulations align with Britain’s consumer duty, which resulted in significant restructuring for firms there.
Although the impact in Ireland may be less severe, the Central Bank intends for the revised code to lead to a ‘substantial’ shift in how firms treat consumers.
Analysis
Firms are encouraged to conduct a high-level analysis of potential gaps, reviewing their Consumer Protection Risk Assessment (CPRA) processes, before integration of the new requirements ahead of the full publication this year.