The Central Bank has written to all regulated firms to reaffirm its expectations on how they treat consumers during the current cost of living crisis.
The Central Bank's "Dear CEO Letter" details the specific actions which firms must address to manage potential risks arising from the changing and challenging landscape for consumers.
The regulator said that firms are required to take action and consider the risks to consumers as a result of the more challenging economic outlook, energy-driven inflation, rising interest rates and much higher consumer prices and business costs.
Today's letter sets out a number of specific steps firms should take to meet expectations in the areas of affordability and sustainability, provision of relevant, clear and timely information, effective operational capacity as well as sales and product governance.
The Central Bank said that firms providing or advising on credit should pay particular attention to their obligations to ensure that credit is affordable, while they should also pay particular attention to assessing not just the current circumstances of the consumer but how those circumstances could be impacted by the current economic outlook.
It also said that companies should be able to identify consumers in vulnerable circumstances, including financial difficulty, and provide them with appropriate supports.
The regulator said that advice on savings and investments needs to consider both the short and long term needs of the consumer and should factor in an anticipated increase in the day-to-day costs consumers may face as well as costs consumers may not anticipate.
Read the Central Bank letter here
Information should be provided to consumers in a manner that allows them to make informed decisions on changing their financial products for more affordable options, shopping around for better value, and what supports are available for those facing difficulties in meeting their payment obligations under existing financial products, it added.
The Central Bank also said that changes to terms or conditions which may impact on the cost of a financial service need to be explained to consumers clearly.
It also said that companies should monitor and manage their resources in a manner that is appropriately reactive to those services which consumers may need to a greater extent, for example if they need credit or are facing arrears.
Finally, the Central Bank letter advises that sales and advice on insurance products should consider the impact of increasing costs on consumers' budgets - both to meet premium payments and in the event of the occurrence of an insurable event. Consumers should be supported to understand the implications of any reduction in cover, it adds.
The Central Bank's Director of Consumer Protection, Colm Kincaid, said it is important that financial services plays its part in supporting consumers to navigate this changing economic landscape.
"The letter we are publishing today highlights a number of areas to which firms should pay particular attention as they do so, in order to ensure that consumers' best interests are protected at this time and recognising the multiple challenges consumers are facing," he added.
