Thursday 14 December 2017

Rule change will allow banks to visit homeowners in arrears

Charlie Weston Personal Finance Editor

BANKS will be able to visit the homes of people in mortgage arrears unannounced under a change in the rules.

The Central Bank has relaxed its own strict code that limits the contact banks can make with people who have fallen behind with mortgage payments.

Existing rules mean that banks are not allowed to plague a borrower with constant contacts to pressure them into paying up. Banks can only make three unasked-for communications a month – either by letter, phone, visit or email.

Now the Central Bank will allow lenders who have been unable to contact a homeowner in arrears to visit their home unannounced, the Irish Independent has learned.

One of the key requirements of the change is that the visit should "represent a positive experience for the borrower", the Central Bank said of changes to the Consumer Protection Code, a rule book that banks must observe.

"While unsolicited personal visits could be difficult for some borrowers, we believe that a lender should be able to visit the home, where attempts at contact have failed and before deciding to commence legal action," the Central Bank said in an update to the Consumer Protection Code, dated January 3.

The change means such a visit would be on top of the three unasked-for contacts that are already allowed to be made by lenders each month.

Some 136,000 residential mortgage accounts are in some form of arrears.

The rule change comes as Independent TD Stephen Donnelly accused Permanent TSB of harassing an unemployed woman in arrears by telephoning her six times a day even though she has arranged to meet the bank this week.

Mr Donnelly said the Central Bank's rules limited banks to three unsolicited contacts with a customer every month.

The Wicklow and East Carlow TD claimed the woman, who is a constituent, was rung 18 times one day by an automated phone calling system.

The bank was in breach of the Consumer Protection Code and the Code of Conduct on Mortgage Arrears, he told 'Today With Pat Kenny' on RTE Radio. Fines of up to €25,000 per offence can be imposed if a lender is found to have contravened the code, he said.

But Permanent TSB denied yesterday it had broken the rules. The rules limited it to three successful contacts a month, but in this case it had not been able to contact the woman.

The bank said the borrower was €50,000 in arrears and claimed there had not been any contact with the bank since the summer.

Protections for those in arrears, including a ban on repossessions, do not apply to those who stop co-operating with their bank, the spokesman for Permanent TSB said.

However, the bank did admit that a meeting had been set up by the branch with the homeowner but this had not been communicated to head office, where the automated calls were coming from.

Irish Independent

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