Frequently Asked Questions for High Cost Credit Providers 

A high cost credit provider is defined as a person who engages in the provision of high cost credit, or who advertises or announces themselves or holds themselves out in any way as engaging in the provision of high cost credit, but does not include:

• Any pawnbroker in respect of business carried on by him in accordance with the provisions of the Pawnbrokers Act,1964
• A society which is registered as a credit union under the Credit Union Act, 1997
• A registered society within the meaning of the Friendly Societies Acts, 1896 to 2021
• A credit institution
• A person who supplies money for the purchase, sale or hire of goods at an APR which is less than 23 per cent. (or such other rate as may be prescribed)
• A mortgage lender

A “high cost credit agreement” is defined in the Consumer Credit Act, 1995 (as amended) as ‘a credit agreement into which a high cost credit provider enters or offers to enter, with a consumer in which one or more of the following apply:

1. The agreement was concluded away from the business premises of the high cost credit provider or the business premises of the supplier of goods or services under the agreement;
2. Any negotiations for, or in relation to the credit were conducted at a place other than the business premises of the high cost credit provider or the business premises of the supplier of goods or services under the agreement;
3. Repayments under the agreement will, or may, be paid by the consumer to the high cost credit provider or his representative at any place other than the business premises of the high cost credit provider or the business premises of the supplier of goods or services under the agreement; or
4. The total cost of credit to the consumer under the agreement is in excess of an APR of 23 per cent., or such other rate as may be prescribed.

“Credit” includes a deferred payment, cash loan or other similar financial accommodation.

The appropriate application form (new or renewal) must be completed and returned to the Central Bank of Ireland with the required items. See the Authorisation Process for high cost credit providers.

The Consumer Credit (Amendment) Act 2022 introduced an interest rate cap on high cost credit agreements as follows:

• 1% per week simple interest on fixed rate loans, up to a maximum of 48%,
• 2.83% nominal interest on the outstanding balance per month on running accounts.

Furthermore, the duration of high cost credit agreements cannot exceed 52 weeks

A person or firm collecting repayments on High cost credit agreements on its own behalf or on behalf of another person or firm must hold a high cost credit provider’s licence and/or hold the appropriate authorisation from the other firm as prescribed by Section 97 of the Consumer Credit Act, 1995 (as amended).

A high cost credit provider’s licence is granted for a period of five years.  Prior to the expiry of the licence, the Central Bank of Ireland will issue a renewal pack to licensed high cost credit providers for completion.

View a list of pre-approval controlled functions.

Themed inspections are one of the tools which we use to monitor compliance with legislation and requirements, such as, the Consumer Credit Act 1995 (as amended), the European Communities (Consumer Credit Agreements) Regulations 2010 and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Licensed Moneylenders) Regulations 2020 . A themed inspection focuses on a specific topic or product rather than on a specific financial services provider.

These inspections are carried out on a number of regulated entities for which the topic would be applicable or those that represent a significant portion of the market share of the relevant product.

Themes are identified from a number of sources including, but not restricted to, consumer complaints and queries, issues arising from previous inspections and market intelligence.

Themed inspections can be conducted by survey or by a combination of a survey and on-site inspections.

In certain cases, particular information relevant to the theme is requested and examined and following examination of this material, firms may be selected for on-site inspection. Firms that are selected for on-site inspection will be requested to have certain information available for examination at the outset of the inspection.

Feedback from themed inspections is provided to the relevant sector(s) of the Industry formally and the findings from these themes are brought into the public domain through publication on our website. Our overall aim is to improve the level of compliance of firms with the relevant requirements and to ensure that financial service providers are acting at all times in the best interests of consumers.

Where a specific compliance issue arises with an individual firm, this is addressed directly with the firm and where appropriate, regulatory action may be taken.

While we select particular themes as part of our monitoring of compliance with the relevant requirements, we expect firms to proactively monitor consumer protection issues in their own firms and to take any appropriate corrective action that may be required.

This themed approach does not preclude us from focusing resources on a particular financial service provider if required.