Financial difficulties can add enormous stress to your life. Now the Central Bank has clarified rules to stop banks harassing you beyond reason.
First creditors are only allowed to make three unsolicited contacts with you a month, whether that is via phone, email or post.
Only three contacts allowed a month
This monthly limit however comes into play after they have made their first contact – so in all they can contact you four times in the first month they are chasing down the debt but three times in any following month.
Missed calls and engaged numbers do not count towards the thrice monthly limit
Lender can visit your home
The lender is entitled to call to your home if you have not answered their calls, texts or responded to their letters or emails.
But under the modified rules, they can’t just turn up at your home.
But lender must give written notice for home visit
They must give at least five working days notice to you in writing.
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.
If the bank or creditor is calling to you regarding mortgage arrears, they must offer to explain the Standard Financial Statement. This is a form the banks send to consumers if you want to restructure your mortgage and involves a detailed written account of your outgoing and income.
But under the code, the bank cannot insist that the consumer completes the form at the time of the visit to the home or the arranged meeting at the bank.
A further personal visit may be agreed with the consumer in compliance with provision 3.38 of the 2012 Code.
The Director of Consumer Protection at the Central Bank advises everyone that the worst thing is not to engage with a creditor – so if the phone or write to you, do respond. All creditors are interested in negotiating with you no matter how much money you owe. Remember they would rather get something from you than nothing.
“The Central Bank believes that early, proactive and positive contact is key to assisting the borrower and lender to discuss and agree the best solution and outcomes to an arrears situation, said Bernard Sheridan.
The code, he says is to ensure consumers don’t come under “undue pressure” and to make sure that the communication with you is “proportionate and not excessive”.
He added that the Central Bank believes a creditor has the right to call to your home if you haven’t engaged in communication with them.
“While unsolicited personal visits could be particularly difficult for some borrowers, the Central Bank believes that it is in consumers’ interests for a lender to be able to visit the home where attempts at contact have failed and before deciding to take legal action.”