The Letter follows the publication by the Central Bank of the Consumer Protection Outlook Report (Report) in March 2022. The Report highlighted five cross-sectoral risk areas facing financial services and set out specific actions to be taken by regulated financial service providers (Firms) to address these potential risks, including:

  • Actively identify and address consumer risks that may emerge from changes in the Firm and its consumers operating landscape.
  • Have sufficient operational resilience to manage change without creating risks to consumers.
  • Proactively assess the risks and consumer impact a commercial decision may pose to new and existing customers and develop comprehensive action plans to mitigate them while ensuring that customers understand what changes mean for them.
  • Have the customer service capacity and structures to meet expected service levels and provide timely and customer-focused service through all channels.
  • Consider the impact of their decisions on vulnerable customers and assist where necessary. This should include specific and effective processes and communication plans to support vulnerable customers.
  • Only design and bring to market products with features, charges, and risks that meet the needs of consumers identified for the product.

In the Report, the Central Bank was clear that Firms should take concrete action to deliver on its expectations regarding the risks identified. For further information on the Report please see our article here.

The Letter reminds Firms of their obligation to operate in a manner that places the best interests of consumers at the heart of their commercial decision-making, particularly against the backdrop of an increasingly challenging economic environment driven by energy inflation and uncertainty. The Letter sets out further steps to be taken by Firms in the context of consumer protection including in relation to the following key areas:

Affordability and sustainability

Firms should:

  • Ensure that credit is affordable, including, in the case of mortgage firms, adhering to specific Consumer Protection Code obligations to assess affordability based on an interest rate increase (i.e. 2% at a minimum).
  • Consider assessing how the current economic outlook could impact the consumer's circumstances.
  • Identify consumers in vulnerable circumstances, including financial difficulty, and provide appropriate support.
  • Consider the consumer's short and long-term needs when advising on savings and investments, including factoring in anticipated day-to-day costs and unanticipated increases in costs.
  • Have clear procedures for calculating a consumer's capacity for loss.
  • Explain the impact that inflation may have on the performance/value of an investment.

Relevant, clear and timely information


  • Consumers should be able to make informed decisions, shop around for better value and know the available support. Firms should provide information accordingly, including on websites, business premises and publicly available material.
  • Firms should inform consumers facing difficulties meeting their payment obligations under existing financial products of support available.
  • Changes to terms or conditions, which may impact the cost of a financial service or product, should be clearly explained by Firms to consumers.
  • Firms should use their data to identify and engage with groups of consumers that may benefit from early engagement.

Effective operational capacity

Firms should:

  • Be reactive and monitor and manage resources to respond appropriately to consumer needs (e.g. customers requiring credit, facing arrears or in need of swift processing of insurance claims and timely processing of credit applications).
  • Plan and ensure they have the required expert resources to assess individual circumstances and offer appropriate and sustainable solutions to consumers.
  • Staff should be trained appropriately, including knowing protections and supports for borrowers under the various Central Bank codes.
  • Pay attention to operational resilience and provide that payment services to consumers go uninterrupted.

Sales and product governance

Firms should:

  • Have robust product governance and oversight arrangements and develop action plans to mitigate such risks.
  • Consider the impact of increasing costs on consumers’ budgets (both to meet premium payments and in the event of an insurable event) in the context of sales and advice on insurance products.
  • Help consumers understand the implications of any reduction in insurance coverage.
  • Engage with consumers to ensure they understand any implications and avoid the cancellation of necessary coverage where customers choose to cancel or reduce insurance coverage due to affordability concerns.
  • Monitor and evaluate the investment products they sell, consider how their risk profile may change in this period of volatility, and seek to mitigate risks to clients accordingly. Relevant factors for consideration in due diligence on products include risk-return profile, liquidity, costs and charges, and any kick-out or trigger features that may alter the nature of an investment product under certain conditions.

For further information on the Letter, please see the Central Bank press release dated 18 November 2022.