Central Bank reinforces consumer protection expectations of regulated financial firms providing Direct Debit services

29 July 2022 Press Release

Central Bank of Ireland

The Central Bank of Ireland has engaged with financial services firms to reinforce its consumer protection expectations of all regulated firms that also operate as Direct Debit originators (DDOs). This follows a review of plans submitted from the financial services firms that are amongst the top 20 DDOs in Ireland, which set out the measures they are taking to support their customers through the large scale migration of customer bank accounts currently underway.

Director of Consumer Protection, Colm Kincaid, said: “The large scale migration of customer bank accounts is a significant challenge for customers and the financial services system as whole. All firms have a duty to support their customers through this period of change and to ensure that customers’ experiences are in line with their expectations.

“Firms who also operate as Direct Debit Originators must now take all necessary action to ensure they can support their customers switching bank accounts in a smooth and timely manner. This should recognise that some customers may experience unexpected issues with their direct debit payments, and they should not suffer any cost or penalty as a result of issues outside of their control.”

In line with our phased approach, in April, the Central Bank sought plans from these firms, to detail what action is being taken to ensure that their customers are supported during the switching process. All the firms reviewed have work underway to ensure customer supports are in place and in a number of cases the review identified good practices including in the area of communications and customer supports. Where issues were identified as part of the review, they are being followed up directly with those firms so action is taken to ensure that customers’ experience is as smooth as possible.

Drawing on the findings of the review, including identified good practices, the Central Bank has outlined its expectations of firms operating as DDOs, including:

  • Proactive identification of all affected customers who may need to take action and update their bank account details.
  • Ensuring customer communications are effective in supporting customers to make informed decisions, including active reminders and ongoing monitoring of whether affected customers have taken action.
  • Have measures in place to ensure continuity of service for customers who may be affected by direct debits that are returned unpaid.
  • Have supports and resources in place for customers who are potentially vulnerable.
  • Ensuring they have sufficient and properly trained resources in place to deal with potential spikes in customer queries.