Minister Tom Kitt Launches New Code of Practice for the Financial Institutions "Code Will Result in Better Information for Consumers on Interest Rates, Fees and Charges" - Kitt "Industry to be Congratulated on Their Initiative" - Minister

Mr. Tom Kitt, T.D., The Minister for Consumer Affairs, to-day (Tuesday 21st March 2000) launched a Code of Practice on Transparency in Credit Charges for Personal Customers.

At this morning's launch, Minister Kitt said "The purpose of this new Code is to improve the amount and quality of information available to the public in regard to the interest rates, fees and charges imposed by financial institutions. There are many important new safeguards in the Code and I am confident that these will contribute to greater consumer confidence in products and services supplied by our country's financial institutions."

The Code will also complement the existing statutory provisions of the Consumer Credit Act, 1995 and the provisions of existing codes operated by the financial institutions.

The Minister also confirmed that the industry's initiative in launching this code comes following concerns which he expressed to the Director of Consumer Affairs about allegations in March and April 1998 of overcharging of customers by a major financial institution.

"I was concerned at the time to ensure that financial institutions were only imposing those charges which had been notified to or approved of by the Director. I was equally anxious to ensure that the institutions were taking all necessary measures to detect any unauthorised imposition of excess charges. Can I say that assurances were forthcoming at that time from all institutions in regard to these matters. However, this new Code goes an important step further in that regard," said Minister Kitt

At the launch, the Minister paid tribute to the industry organisations which had developed and issued the code.

"The Irish Bankers' Federation, the Irish Mortgage and Savings Association, and the the Irish Finance Houses Association are all to be congratulated for bringing this Code into existence. The Director of Consumer Affairs, Carmel Foley, also deserves credit for the support she has demonstrated for this effort," said Minister Kitt.

"By undertaking to comply with its terms, the financial institutions are acknowledging their obligations to consumers, on whose custom they - the financial institutions - depend. Consumers are becoming increasingly conscious of the power which they wield over the businesses from which they purchase goods and services. And businesses are beginning to realise that without the consumer there would be no business. Business must provide goods and services, including financial services, of top quality and at a reasonable price. Consumers who are not satisfied they are getting a quality product or service can apply the ultimate sanction and vote with their feet by bringing their custom elsewhere.

"But real customer power is about having access to clear and unambiguous information about the product or service they are seeking so that they clearly understand what is on offer. It is also about the choice to decide between competing business as to which is offering the product best suited to their needs.

"This new Code is all about providing that access to information and that choice to consumers. The benefits for business are to be found in satisfied customers who, in turn, generate more business. There is no longer - if, indeed, there ever really was - a contradiction between the requirements of industry and those of consumers," concluded Minister Kitt.