Banks and insurers warned to protect customers as economy turns sour

The central bank has written to the heads of all regulated entities, setting out their expectations for how they treat consumers in the context of what they believe is a changing consumer landscape.

The so-called “Dear CEO Letter” contains no new measures, but is seen as a warning shot that the measures taken by retail financial institutions may be judged more harshly at a time when more and more consumers are coming under financial pressure.

The central bank said companies are expected to “play their role in supporting their customers”.

In some cases, the measures described could make it more difficult to obtain a mortgage or other loan.

The letter warns that companies offering or advising on credit should pay particular attention to their commitments to ensure credit is affordable – including whether a borrower’s job or income is secure.

“Businesses should take special care to assess not only the consumer’s current circumstances, but also how those circumstances might be affected by the current economic outlook. In particular, businesses should be able to identify consumers in vulnerable situations, including financial difficulties, and provide them with appropriate support.”

Businesses must take action and consider the risks to consumers posed by the tougher economic outlook, energy-related inflation, rising interest rates and significantly higher consumer prices and business costs, the letter, signed by Consumer Protection Director Colm Kincaid, says.

“It is important that financial services do their part to help consumers navigate this changing economic landscape. The letter we are publishing today highlights a number of areas that businesses should pay particular attention to in doing so, to ensure consumers’ best interests are protected at this time and to recognize the multiple challenges consumers are facing face,” he said.

The letter warns that businesses should have sufficient staff and training to engage with vulnerable or potentially vulnerable customers.

They should use their data to identify potential consumer groups that might benefit from early engagement and run early and appropriate engagement campaigns with those consumers, it says.

Customers who cancel or limit their insurance coverage should be made aware of the potential risks. Banks and insurers warned to protect customers as economy turns sour

Fry Electronics Team

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