THE CENTRAL Bank has written to the State’s financial institutions to clarify how and when they can make contact with people in arrears.
The move comes after the bank uncovered significant confusion among lenders as to what level of contact was permitted.
Under the Consumer Protection Code and the Code of Conduct on Mortgage Arrears, lenders are forbidden from contacting customers in arrears more than three times in one calendar month. This includes all forms of communication, such as phone, email, letter or personal contact.
The bank’s clarification letter covers three areas, initial communication, ongoing communication and unsolicited visits to debtors’ homes.
Initial contact must be achieved, and a conversation must be held with the borrower, or a letter, a text or an email must be sent. The initial attempt at correspondence is in addition to the limit of three contacts per month. Unanswered calls do not count among the monthly contacts.
The Central Bank said a lender could only make an unsolicited personal visit in relation to arrears when all other attempts at contact had failed over a period of three months, and prior to taking legal action.
“Our guidance provides further clarification to aid lenders’ understanding and to ensure they are meeting the consumer protection requirements of both codes when making contact with consumers in arrears by telephone and through visits to their home,” Central Bank director of consumer protection Bernard Sheridan said.
Mr Sheridan accepted that although unsolicited personal visits could be particularly difficult for some borrowers, the bank believed it was in consumers’ interests for lenders to be able to visit homes where attempts at contact had failed, and before they decided to take legal action.
