FINANCIAL INSTITUTIONS MUST take action to protect their customers from fraud and scams under new consumer protections measures to be introduced next year by the Central Bank.

The banking regulator is seeking to make lenders more transparent, through changing the phrasing, conditions and responsibilities in the Consumer Protection Code – which enforces a range of customer rights.

Through the introduction of effective, continuous and clear communication, the Central Bank hopes that banks will be able to mitigate scammers who may seek to defraud their customers.

Fraud is on the rise, according to research by the Central Bank, and led to €126m being stolen from banking customers in 2023 alone, a €26m when compared to 2022. Polling suggests that 80% of Irish customers have been or are actively targeted by fraudsters. 

The new consumer protection code, which will be in place from March 2026, creates strict rules around how banks approach, contact and speak with customers or potential clients and stresses the need to have clear, transparent communication with the public.

Instead of a culture of disclosures, the code incentivises companies to carry out effective communication to inform customers about the day-to-day activities of the bank and its current performance.

Continuous communication will also prevent unregulated purchases, as the code states that consumers must never be under the assumption that all operations carried out by a regulated institution are protected.

Greenwashing – when firms and other entities make false claims about the environmental benefits of purchases, products or decisions – will also be more heavily monitored, as financial institutions will be required to state the intended impact new products should have on the climate.

Separately, this new code will require banks to issue detailed information about mortgage switching, including the requirements, associated costs and cost of credit, so that consumers can make informed decisions and comparisons.

The Central Bank has also revised its definition of vulnerable customers, to include a more fluid description of who and when clients are considered at risk or vulnerable. This will require lenders to be more attentive and engaged with that cohort.

Banks will also be required to introduce and developer digital services, with a customer-focused approach in terms of the design and implementation. This will create accessible services to all types of customers.

Companies have one year to put in place the revised consumer protection code, which was published after an extensive review, consultation and survey period. It was developed following engagement with customers and the industry.

Governor of the Central Bank Gabriel Makhlouf has welcomed the publication of the new code, with has been developed over ten years. He said the new changes must reflect the new opportunities that banks have to engage with customers.

“Consumers will benefit from a package of protections that better reflect how they are accessing financial services in the modern world,” he said.