The Free Legal Advice Centres (FLAC ) recently published a report examining and assessing the current legal protection given to consumers of credit.
Click here to read the Executive Summary of the report
Click here to read the Report in full.
The principle of FLAC’s study was to examine the level of protection given to consumers of credit and to ascertain whether this protection is adequate.
The study concluded that the protection on offer to consumers of credit is deeply flawed.
At EU level, the problems have arisen where EU directives have been implemented in a rushed manner resulting in these directives being either out of date and/or significantly watered down. The need for a single market has come at the cost of not providing adequate protection to consumers of credit.
At domestic level the interests of the credit consumer have been placed secondary to the interests of policymakers, the regulatory authorities and primarily the financial service providers whom they regulate.
The report has correctly remarked that this was not always the case. Pre-boom the 1995 Consumer Credit Act went considerably further than the Directive it was implementing in providing further legal protections for consumers of credit.
In contrast, during the boom years against the backdrop of an EU policy shift towards a more market than consumer-driven policy, the Irish authorities adopted a much more ‘hands-off’ approach to consumer protection regulation. The Report observes that “this is most plausibly explained by the pursuit of ultimately unsustainable rather than balanced economic growth that resulted in the prioritisation of property-related tax revenues over consumer rights”.
The study was also deeply critical of the Financial Services Ombudsman (FSO) service. The Report reveals that the overall view from those who had engaged with the FSO was a “negative one”. From the consumer/advocate perspective, “the process appeared to be overly formal, impersonal, onerous and confusing to the extent that many consumer respondents appeared to have become almost completely lost in the process”.