Central Bank publishes fourth Consumer Protection Bulletin with key trends on Current Accounts and Switching

• All credit institutions providing current accounts in Ireland are subject to the Switching Code
• Number of customers switching current accounts remains low
• 99% of the number of switches completed under the Switching Code were completed within the timeframes prescribed by that Code

The Central Bank of Ireland today publishes its Fourth Consumer Protection Bulletin (PDF 1.95MB), which was compiled using data gathered from credit institutions.

This bulletin provides a high level overview of the number and value of consumer current accounts held by personal consumers, the number of consumers using the Central Bank’s Code of Conduct on Switching of Current Accounts (The Switching Code) and the number of consumer complaints received by firms in relation to current accounts since our last Consumer Protection Bulletin on this topic (H1-2015) – available here.

The key trends include:

• The number of current accounts held by personal consumers has decreased in the period H2-2013 to H1-2016[i], although there has been a slight increase in H1-2016 compared to H2-2015;
• There continues to be an increase in the value of current accounts held by personal consumers over the same period (H2-2013 to H1-2016);
• While switching levels remain low, 99% of the 3,600 current account switches completed in H1-2016 under the Switching Code were completed within the timeframes prescribed by the Code.
• Current accounts continue to represent the largest number of consumer complaints about banking products (while still being less than 1% of the overall current account numbers).

Notes to Editors

1.   This is the Central Bank’s fourth Consumer Protection Bulletin. The Central Bank will continue to publish these bulletins periodically, covering various aspects of the market.

2.   The Switching Code provides for:

• A smooth, efficient switching process for the consumer;
• Consistency of approach to the process by all relevant institutions; and
• Protection and support for consumers contemplating, undertaking and/or completing the switching process.

3.   In September 2016, following the introduction of the Payment Accounts Directive, the Switching Code was revised and renamed the “Code of Conduct on the Switching of Payment Accounts with Payment Service Providers”. The Switching Code now applies to credit institutions, payment institutions and e-money institutions that offer payment accounts.

4.   Payments Accounts Directive

The Payments Accounts Directive came into effect in Ireland in September 2016. It covers three distinct elements; transparency and comparability of fees, access to payments accounts with basic feature and payment account switching.

What does this mean for consumers?

This will allow consumers to compare offers from different payment services providers and to make informed decisions on the payment account that best suits their needs. The payment account with basic features must be made available to consumers by relevant credit institutions that offer payment accounts.  Features of the account include the following;

• Consumers will be able to place funds in the payment account, withdraw cash from their account, execute direct debits, credit transfers and payment transactions including on-line payments.
• The account will be free of charge for the first year, and will remain free to consumers lodging not more than a specified amount to the account.
• Thereafter reasonable fees may be charged for transactions carried out in a currency other than euro.
• An overdraft facility will not be available on such an account.
• A credit institution may refuse to provide a basic payment account where the consumer already has a payment account in Ireland.
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[i] ‘H1’ refers to the first half of calendar year, i.e. 1 January until 30 June. ‘H2’ refers to second half, i.e. 1 July until 31 December.