CPC Conduct

Accounts

Before opening a joint account for personal consumers, a credit institution must warn each personal customer of the consequences of operating a -joint account, specify transactions for which the consent of all is not required, ascertain whether statements are to be provided separately to each  joint account holders and ascertain any limitations which personal consumers may wish to impose on the account.

A regulated entity cannot provide unsolicited preapproved credit to a personal customer.  It may only increase a personal credit limit in line with an agreement with the consumer.  Where a charge is intended to be made in respect of the provision or arrangement of a loan to a personal consumer and is to be advanced incorporate in the loan amount, the entity must give the consumer the right to pay the charge separately and not include it in the loan.

Bundling

Products and services must not be bundled. The sale of a product or service must not be made contingent on the consumer purchasing another product or service from the same entity or a related entity. Additional products or services may be offered to existing consumers which are not available to potential customer.

Where a feeder account is required to avail of other products, the consumer must not be obliged to use it other than for the purpose of facilitating payments for the private concern.  Charges cannot be applied for using the feeder account for its established purpose.  Additional services must be options and must be activated only by the consumers.

Bundling is permitted only if there is a demonstrable cost saving to the consumer.  Prior to offering or arranging a bundled product, the service provider must provide the consumer with certain information on paper or a durable medium including

• the overall cost to the consumer of the bundle;
• cost of each product separately
• how to switch products within the bundle,
• cost of switching products to exit,
• cost of exit.

Certain information must be provided when a consumer wishes to switch one or more products in the bundle or exit the bundle.  Where an optional extra is offered in conjunction with the product or service, the consumer must be informed that he has the right not to purchase the optional extra in order to buy the main product.  He must be informed of the  cost of the basic product and service and the cost of the optional extra.  The consumer must not be charged any fee for the optional extra unless the consumer has confirmed that he wishes to purchase the optional extra.

Certain Conflicts

Where payment protection insurance is offered in conjunction with a loan the lender must exclude payment protection from the initial repayment estimate of the loan and advise the consumer of the amount of the premium separately.  Separate application forms must be used for the protection and the loan.

A regulated lender’s insurance company et cetera may only pay fees and commissions for the provision of regulated activities only to certain persons who are themselves regulated  or otherwise certified or authorised.  The persons must not only be regulated, but they must be regulated for the particular purpose/ function concerned.

A deposit agent must not retain the account passbook of a consumer.  He must not operate on the same premises as a deposit broker.

A regulated entity must have a written conflict of interest policy appropriate to its activities.  It must identify activities which may give rise to a conflict of interest which may damage the interests of consumers.  It must specify procedures to be followed in order to manage the conflicts.

If a conflict arises and can’t be reasonably  avoided, it must disclose the nature and source of the conflict to the consumer.  They may only undertake business on behalf of the consumer in such circumstances where the consumer has acknowledged on paper or in a durable medium that he is aware of the conflict and wishes to proceed.  The entity must ensure the conflict has not damaged the interests of the consumer.

A regulated financial services entity distributes products to consumers through  an intermediary, it must not require the intermediary to introduce a specified level of business in order to retain its employment.  Where an entity placing products through intermediaries pays commissions based on the level of business, it must be able to demonstrate that the arrangements did not compromise the intermediary’s duty to act in the best interests of consumers and does not give rise to a conflict of interest between the intermediary and the consumer.

A regulated financial service provider must ensure that its remuneration arrangements with employees in connection with providing, arranging and recommending products and services to consumers are not structured in a way which has the potential to impair the obligation to act in the consumer’s best interest and satisfy suitability requirements.

Financial service providers must ensure there are effective Chinese walls between different areas of businesses and between the entity and its group companies in relation to information which could give rise to conflicts o -interest or the risk of abuse.

There must be written procedures in relation to maintenance of the Chinese walls and the consequence of the breach. Chinese walls are arrangements in an organisation or between connected organisations so that  information is withheld from other units of the organisation.

Financial services provider must take reasonable steps to ensure that its officers or employees do not offer, give or solicit gifts or rewards not to feel otherwise likely to conflict with its duties.

A soft  commission arrangement is an agreement under which a regulated entity receives goods or services in return for which it agrees to direct business through or in the way of another person.  Such an agreement must be entered in writing.  Where it exists business must be transacted in a way that does not conflict with the best interests of the consumer.

Where an entity considers the consumer may be affected by the arrangement, the consumer must be informed of its existence and how it might affect them.  A copy must be made available on request.  Goods and services received under the arrangement  must be used for the  provision of services to consumers.  The entity must provide a customer with details of changes in the policy and soft commission arrangements promptly.

Contact

A regulated entity must not make unsolicited personal visits to a consumer who is an individual.  It may only make a personal visit to an individual if he has given informed consent to being contacted by a personal visit.  Consent must be obtained for each visit and a record of consent must be maintained.  The consent must relate to the purpose of the visit including in the case of sales and marketing, the type of products discussed and the time and date for the visit.

Telephone contact may only be made with an existing consumer provided

• the entity has within 12 months provided that consumer with a product and service similar to the purpose of the telephone contact
• the consumer holds a product or service which requires the regulated entity to maintain contact in relation to that product and the contact is in relation to that product.
• the purpose of the telephone contact is limited to offering protection policies or
• the consumer has given his consent for being contacted in this way.

Contact may only be made with a consumer other than  an existing customer.

• if the consumer signed a statement within the previous 12 months giving the regulated entity permission to make telephone calls for  specified purposes and the contact is for such purposes:
• the consumer has a listing in a business section of the current telephone directory, trade/  professional directories in the state and contact are made via the business number;
• the consumer is a director of the company or partner in a firm and contact is made via the business number in connection with the role of director or partner;
• the consumer is the subject of a referral for which the consumer has provided express consent received from an entity authorised to provide financial services in Ireland and other entity within the group, a solicitor  or a certified person;
• the purpose is limited to offering protection policies.

In the case of a referral,  it must be followed by an indication to the consumer that the referral has been made and the caller must ask for consent to proceed. When it makes telephone contact , it must record the referral.

The telephone contact may only be made between 9:00 a.m. and 9:00 p.m. Monday to Saturday excluding public holidays and bank holidays unless otherwise agreed with the consumer.

Where a person makes a personal visit or telephone contact, under the code,  he must immediately identify himself by name, identify the entity, inform that the telephone call  is being recorded if this is so, disclose the source of business lead or referral and establish if  the consumer wishes the personal visit or contact to proceed.  If not, it must be ended immediately.  The regulated entity must abide by the request not to make the visit or telephone contact again for sales and marketing purposes.

Intermediaries

Insurance intermediaries must lodge monies received for premiums paid into a segregated client premium account.  They must operate separate accounts for life or non-life business.  Regulated entities must ensure payment from a client premium account state that the payment emanated from the account concerned.  It must never be overdrawn.

There are certain limited types of lodgements and withdraws only that may be permitted from a client premium account.  Insurance intermediaries must undertake reconciliations of amounts due to insurers other entities and the balance on the client premium account.

In the case of new investment products produced by a product producer for sale to the customers the following details must be provided to the intermediary:

• Key characteristics and features;
• The target market for consumers of the product
• nature and extent of risks inherent in the product;
• nature level extent limitations of any guarantee attaching to the product;
• name of the guarantor.

In selling an investment product to consumers through an intermediary the product producer must provide information to the intermediary about the investment product that is clear, accurate, up-to-date, not misleading and includes certain key information.  The producer must provide an on-going facility to the intermediary to ask questions and obtain information about the product.  It must provide the facility to the intermediary for the duration of the period during which the product is offered for sale and inform the intermediary of his right with respect to the on-going facility.

Within the first year of launching an investment product which is sold to consumers and at least annually thereafter the product provider must update the information.

A regulated entity must maintain a publically accessed register of all mortgage intermediaries to which it has issued a current appointment.  On termination of the appointment, it must provide the Central Bank with confirmation in writing of the removal.