Certain financial institutions are not adequately informing their customers about the severe penalties which apply if they fall into arrears on their mortgage, the Director of Consumer Affairs has claimed.
Ms Carmel Foley said some banks and building societies were "burying" details of the penalties in small print and were putting people "through hell" by making them pay punitive interest charges for falling behind.
She was speaking after the publication of her office's annual report, which included a significant number of complaints from the public about the issue. She declined to name the institutions involved.
She said the Consumer Credit Act 1996 specifically required financial institutions to be transparent about the penalties and while institutions observed the "letter" of this law, some did not observe its "spirit".
Consequently it was important for penalties to be "brought to peoples attention in a more effective way", she said. She suggested penalties be outlined in the "letter of offer" from the institution to the consumer.
Her report said several people, facing legal proceedings over their mortgage arrears, had contacted her office and asked for assistance. She had to tell them her office had no power over interest rates, but could ask the institutions to be more transparent in the information they provided.
The majority of complaints made to Ms Foley's office related to clothing, motor vehicles and holidays. While a total of 17,381 calls were made to the office, it was decided to launch 1,320 official investigations.
The report claimed when some consumers ended their motor vehicle hire contract, heavy charges were applied, which were not outlined clearly in the original offer. A significant portion of the report covers the period of Ms Foley's predecessor Mr William Fagan, who now works with the cable company Princes Holdings.