Summary Of The Consumer Protection Code

Author:Ms Sofia Garcia-Bragado Manen
Profession:Dillon Eustace


In August 2006, the

Financial Regulator published the Protection Consumer Code which applies to

entities regulated by this authority.


The Consumer Protection

Code applies to the entities regulated by the Financial Regulator and entities

with an equivalent authorisation in a different Member State. The General

principles apply to customers in the State and the other chapters to consumers

in the State. In any case it includes credit institutions, insurance

undertakings, investment business firms (excluding MiFID services), insurance

intermediaries, mortgage intermediaries and credit unions. The Code does not

apply to regulated entities when:

Providing services to

persons outside the State

Providing MiFID services

Providing the services of

a ìmoneylenderî

Carrying on the business

of reinsurance mediation

Carrying on the business

of a ìbureau de changeî or ìmoney transmissionî

If such firm is a credit

union, when providing services for which it does not require to be authorised

or registered with the Financial regulator

General principles

Chapter 1 of the Consumer

Protection Code establishes the general principles that regulated entities must

follow which focus on the main areas:

Honesty and best

interests of the customers

Professionalism and


Disclosure of relevant


Avoiding conflicts of


Avoiding undue pressure

or undue influence on the customer

Compliance with the Code.

Common rules for all

regulated entities


the name of the product

or service must be clear

the instructions and

conditions from the consumer must be processed properly and recorded

prohibition of sales

linked to ìcontingentî purchases or extra charges for optional products or

services not wished.

All warnings required

must be prominent

Access: Consideration must

be taken of the provisions of the relevant anti-money laundering guidance


Terms of business:

Regulated entities must draw up their terms of business which must include certain

minimum information and provide each consumer with a copy.

Provision of information to

the consumer: This paragraph deals with the quality and frequency of the

information to the consumer, the information in the event where the entity

ceases to exist, the documents conferring ownership rights, and other specific

issues such as records of telephone conversations, receipts, electronic media


Preservation of consumer's

rights: The Code establishes a prohibition to exclude or restrict legal liability

or duty of care that the entities are required to take under the legislation or

the Code, any duty to act with skill, care and diligence and the liability for

failure to exercise the degree of care, skill and diligence expected.

Knowing the consumer: This

paragraph mainly requires that a regulated entity must gather and record

sufficient and appropriate information from the consumer to be able to

recommend a product or service and other obligations related to this issue.

Suitability: The entity

must ensure the suitability of the product for the consumer and prepare a written

statement setting out the reasons a copy of which should be given to the


Unsolicited contact

(coldcalling): This paragraph establishes the specific cases and conditions where

unsolicited contact by way of a...

To continue reading