On 28 October 2010, the Central Bank of Ireland (the “Central Bank”), published Consultation Paper 47, a review of the Consumer Protection Code (the “CPC”). The Consultation Paper outlined proposed new requirements for regulated firms when dealing with consumers, in addition to strengthening existing requirements in key areas such as enhanced disclosure and transparency requirements.

The Code

The Code came into effect in July 2007 and the new proposals are designed to give added protection to consumers. Matthew Elderfield, Head of Financial Regulation in the Central Bank, has stated previously that consumer protection was one of his three key priorities, in addition to strengthening the banking system and adopting a more assertive risk-based supervision approach. Bernard Sheridan, Assistant Director General at the Consumer Protection Division of the Central Bank, said that “the review of the Code is the most significant strengthening of consumer protection requirements for financial firms since the Code was first introduced three years ago”.

The purpose of the Code is to ensure the same level of protection for consumers regardless of the type of financial service provider they may choose. Regulated entities are required to act in the consumers’ best interests by ensuring, for example, that they know and understand consumers’ needs and sell them products and services suitable to their needs.

The Proposed Changes

A revised Code incorporating the proposed amendments is attached to the Consultation Paper. Some of the more significant changes proposed in the revised Code include:

  • a definition of “vulnerable customer”, whereby firms will be encouraged to apply a greater level of care to a consumer where a vulnerability is identified;
  • more stringent suitability requirements, assessing whether a product or service is suitable for a consumer and meets the consumer’s needs and objectives;
  • the imposition of stricter time limits in dealing with overcharging errors, including requirements that errors must be fully rectified within six months;
  • new requirements on product producers such as proposals that they must, when designing new investment products, identify the target market for which the product is likely to be suitable; and
  • more rigorous ‘know your customer requirements’ whereby it is proposed that firms will be required to gather and record information specifically on the customers’ personal circumstances, needs and objectives, financial situation and attitude to risk.

In addition to seeking views on the proposed changes to the Code outlined above, the Consultation Paper sought views on specific issues including information that must be given to consumers about products, further limitations on unsolicited contracts with consumers and the treatment of vulnerable consumers.


The closing date for submissions on the proposed amendments to the Code and consultation questions has now passed and all submissions received from interested parties and relevant market participants have seen published on the Central Bank website. They include submissions from various insurance industry companies and representative bodies.

The Central Bank is currently assessing these submissions and it is anticipated that the updated Code will become effective in mid-2011.