THE QUALITY OF customer service “is not yet where it needs to be” for borrowers facing early arrears on their mortgages, the Central Bank has said. 

The Central Bank of Ireland has carried out a review of the supports that banks, retail credit firms and credit servicing firms provide for borrowers in or facing early arrears. 

Colm Kincaid, Director of Consumer Protection at the Central Bank, said that the review comes as “we see an increased number of borrowers falling into early arrears, as increased costs of living impact on borrowers’ finances”. 

The review found that where there is engagement between lender and borrower under the Code of Conduct on Mortgage Arrears, solutions are being found to support borrowers.

It also found that firms have made improvements to their processes and supports.

However, the review also found that the quality of customer service “is not yet where it needs to be in the context of specific challenges for borrowers facing early arrears at this time”, Kincaid said. 

He outlined that the Central Bank review found instances of late and incomplete information provided by lenders, unclear website information, inadequate follow up with the borrower, lack of assistance in completing paperwork, and failures to recognise where borrowers were experiencing financial difficulties.

“We have set out to the firms we regulate the improvements they need to make,” Kincaid said. 

He said that as well as dealing with the deficiencies identified, the Central Bank has also called out examples of good practice it witnessed in firms’ websites. This includes their “use of plain English paperwork and prepaid return envelopes, incentives for borrowers and crucially, staff demonstrating empathy and willingness to accommodate borrowers through particularly difficult situations such as bereavement”.

“It is critical that firms make these improvements to meet their responsibilities to support consumers in or facing mortgage arrears and avoid the risk of those arrears becoming longer term. This needs to be a priority for all firms,” Kincaid added. 

The Central Bank has also encouraged firms to make greater use of temporary Alternative Repayment Arrangements (ARAs) to support borrowers where there is a risk that their situation will get worse during the time needed to gather information and assess the situation. 

The review found minimal use of these types of temporary ARAs in the majority of firms. 

“I encourage any borrower in or facing any financial difficulty to engage with their mortgage provider,” Kincaid said.

“They are required to support you and seek a solution that is affordable and aims to keep you in your home.”