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The Central Bank of Ireland (CBI) has unveiled a modernised Consumer Protection Code, introducing strengthened protections against fraud and a broader approach to customer vulnerability.
The revised rules, published this week, follow an extensive review and are tipped to come into effect in March 2026.
The updated code mandates that financial firms take greater responsibility for safeguarding consumers, particularly in a rapidly evolving digital landscape where scams and financial crime are on the rise.
“The modernisation of the Consumer Protection Code is a significant milestone for the protection of consumers of financial services in Ireland, and is built on the strong foundations of its predecessor,” said Gabriel Makhlouf, CBI governor.
Makhlouf added that the “ways in which we as consumers buy, use and engage with financial services are changing significantly”.
“These changes reflect new preferences, provide new opportunities and meet different needs on the part of individuals, households and businesses,” he said.
“But they also create new challenges and new risks in the financial sector that we supervise and for the consumers we protect. In the face of this changing ecosystem, we need to adapt, evolve and transform.”
Tackling fraud
Recognising the growing sophistication of financial scams, the revised Consumer Protection Code shifts from merely requiring firms to disclose risks to actively protecting customers.
Organisations must now implement stronger fraud prevention measures, such as detecting hesitation or uncertainty in online transactions and offering customers additional support when needed.
New security features, including payment blocks for new payees and opt-in restrictions for gambling transactions, will also be required.
In addition, firms must enhance their monitoring systems to detect and prevent the use of money mules, who are often unknowingly recruited to facilitate financial crime.
More support for vulnerable customers
The modernised code also takes a broader approach to consumer vulnerability, recognising that individuals can move in and out of vulnerable circumstances due to life events such as bereavement, illness or job loss.
The CBI has said that it expects firms to proactively identify and respond to these situations rather than applying rigid labels to certain consumers while overlooking others.
According to the central bank, fair treatment of vulnerable customers must be embedded in corporate culture, shaping product design, service delivery and customer interactions.
In addition, all staff, not just customer-facing teams, need to be trained to recognise and respond appropriately to vulnerable consumers, which should lead to better support and protection across the financial sector.
International comparisons
The revised code's emphasis on proactively combating fraud and increasing support for vulnerable customers aligns with the principles in place in other jurisdictions, both close to Ireland and further afield.
For example, similar compliance requirements are determined in both the UK Financial Conduct Authority's (FCA) Consumer Duty and the Monetary Authority of Singapore’s (MAS) Fair Dealing Guidelines.
Both the FCA's Consumer Duty and the CBI’s revised focus on proactive consumer protections set out that firms need to anticipate and mitigate potential harm, rather than responding after issues arise, yielding a higher standard of care in financial services.
Transparency and effective communication are also central to both approaches. Providers are expected to ensure that consumers receive clear, understandable information, enabling them to make well-informed decisions about financial products and services.
Another key priority in both frameworks is the fair treatment of vulnerable customers. Both regulators recognise that vulnerability can be temporary or situational, and therefore require firms to identify and support consumers who may be at risk due to factors such as bereavement, illness or financial hardship.
Similarly, the MAS updated its Fair Dealing Guidelines in May 2024 to apply to all financial institutions and the products and services they offer.
The expanded scope is based on a clear understanding of the change in how financial services are used — thanks in part to the growth of disrupters such as payments firms.
Regulators such as the CBI, the FCA and the MAS are ultimately updating their consumer protection rules to address an evolving financial landscape, which is characterised by digitalisation and increasingly sophisticated financial products.
These updates aim to mitigate emerging risks, enhance consumer trust and ensure that financial institutions (FIs) prioritise fair treatment and transparency in their operations.
By modernising regulations, these authorities are seeking to provide bolstered frameworks that safeguard consumers against both new and existing financial threats.
Firms operating in other jurisdictions should anticipate similar moves from their regulators, whether via interventions to improve customer communications or to tackle issues such as fraud.
