The Central Bank of Ireland is applying new consumer protection legislation to ensure that hire purchase, consumer hire, and buy now, pay later providers and services adhere to new rules under the direct authorisation of the Central Bank.
The Central Bank says the new legislation closes a consumer protection gap, enabling users who enter into indirect credit agreements to be protected by the Central Bank’s consumer protection framework.
Under the new rules, the Central Bank expects firms and their staff to meet the necessary minimum competency standards, required of staff with a particular emphasis on staff dealing with consumers in relation to retail financial products, "at the earliest possible opportunity".
The Act introduces an interest rate cap of 23% APR on all credit agreements provided to the consumer. The Act also ensures that all retail credit firms must comply with Section 149 of the Consumer Credit Act 1995, and notify the Central Bank if they wish to introduce any new charges or increase any charge that has been previously notified to the Central Bank.
Gerry Cross, director of financial regulation - policy and risk says: "Extending our consumer protection framework to these firms will ensure that Irish consumers receive the same protections that we require of other financial service providers. Our aim is to ensure that consumers have the same level of protection no matter where they source their financial services.”