THE CENTRAL BANK of Ireland today published a consultation paper on additional consumer protection requirements that debt management firms may have to adhere to.
The series of proposed protection requirements include the provision more information on debt management firms being given to customers that would come in the form of a standard information template which must be provided upfront to the consumer on ‘Using Debt Management Services – what you should know’.
Information
More information on charges should be given to customers, with charges only to be imposed after the consumer has signed an agreement which clearly specifies the charges payable for the service, when they will be payable and the services that will be provided for those charges.
The draft recommendations also suggests that a standardised method of financial assessment must be adopted for the debt management sector.
Debt management firms must also consider the full range of debt solutions available to and suitable for the consumer, having regard to their personal circumstances.
Risks
A statement of suitability is to be provided to consumers and must include a description of the actual or potential risks and consequences of the proposed course of action.
The draft paper is also looking for for views on advertising for debt services, conflicts of interest and review of debt management arrangements.
Director of Consumer Protection Bernard Sheridan said the Central Bank encourages consumers to make sure that, before signing any agreements with a debt management firm, they fully understand the amount and nature of any fees being charged and are also clear on what services they can expect from the firm in return for such charges.
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