Leadership

Regulator to toughen up on firms over-charging consumers

08.02.2010
The Financial Regulator is conducting a review of its approach to how overcharging is dealt with under the Consumer Protection Code, the country’s new Head of Financial Regulation, Matthew Elderfield, said today.

The review will aim to strengthen the regulator’s approach concerning the timeliness of resolving overcharging in firms and the grounds for enforcement actions against such failures.

‘It is clear from recent cases that change is needed in how firms handle charging and pricing issues,” Elderfield (pictured) said, adding that the regulator is concerned that financial institutions continue to experience control failures that result in customers being overcharged.

“While the complexity of cases vary, it is nevertheless disappointing for consumers that resolving errors and providing restitution can be so drawn out at times. It is also apparent that the current approach to enforcement falls short of what is required to provide a strong incentive for faster responses and better practice in the first place,” he added.

Elderfield said that when appointed, the new Assistant Director General for Enforcement at the Regulator will also be conducting a fundamental review of its enforcement strategy, which will include the approach in this area.

The regulator’s announcement comes on the same day that Allied Irish Banks (AIB) admitted to an error that saw the accounts of an estimated 40,000 customers incorrectly classified, which resulted in incorrect charges being applied.

The lender said this incorrect classification may have arisen over a number of years and could have resulted in incorrect fees and charges and/or interest being applied to customer accounts.

It said it will contact all those affected by 31 December 2010 and that a process is now underway to identify the impacted accounts and to refund affected customers by March 2011.