THE CENTRAL BANK has sent a letter to mortgage lenders clarifying the rules of conduct that must be adhered to when contacting borrowers who have fallen into arrears.

The Central Bank letter set out the protections and limits that exist both in the Consumer Protection Code 2012 and the Code of Conduct on Mortgage Arrears in the letter.

It explains that borrowers must be encouraged to engage with lenders – but that lenders cannot harass those who have fallen back on their repayments with excessive phonecalls and letters.

The Central Banks explained that initial contact refers to “successful communication” – ie a conversation with the customer, a letter sent, or a text or email. Following initial contact, a lender is not permitted to make unsolicited contact with borrowers more than three times in a calendar month. However, missed calls do not count towards this monthly limit.

The letter clarified that unsolicited personal visits can be made by a lender when all other attempts at contact have failed – and prior to legal action – but that a number of rules about how such visits must be conducted exist:

• A lender must give a customer at least five working days’ notice in writing about the intended visit
• The letter will not count towards the limit of three unsolicited contacts in a calendar month
• The tone of the letter should be “appropriate and positive”
• The letter should outline the importance of the engagement and the intention of the visit, the consumer protections available and the relevant contact details for the lender (or its Arrears Support Unit in the case of mortgages)
• The lender should offer to meet the consumer in a local branch instead of their home and should be advised that they may wish to consider having a third party present
• During visits in relation to mortgage arrears under the CCMA, a lender should offer to explain the Standard Financial Statement (SFS), but cannot insist that the consumer completes the form at that time
• A further personal visit may be agreed with the consumer in compliance with provision 3.38 of the 2012 Code

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