Consumer Law: The European Agenda
Mary Donnelly
School of Law, UCC
11 December 2014
The European Union (and its predecessors) has had a substantial impact on Irish consumer
law. Indeed, for some of the 1980s and much of the 1990s, Ireland had largely ceded
consumer law and policy making to Brussels (with the notable exception of the Consumer
Credit Act 1995), restricting domestic involvement primarily to the transposition of
European directives usually with minimal domestic engagement. Fortunately, this inactive
phase has come to an end and a distinct Irish consumer law is now developing. Consultation
has started on the Consumer Rights Act which hopefully will be enacted within the next 18
months or so. The Central Bank’s Consumer Protection Code provides a high level of
consumer protection in respect of financial services and, although the question of whether
and how a breach of the Code can be relied upon before the courts remains open (see the
most recent decision in this regard by Baker J: Ryan v Danske Bank A/S t/a Danske Bank [214] IEHC 236 which indicated that the Code could be used as a shield but not as a sword),
the Code is clearly arguable in any complaint to the Financial Services Ombudsman: see
Carr v Financial Services Ombudsman [2013] IEHC 182, where Herbert J noted that “[t]he
Code is a significant feature of the landscape within which the [FSO] operates and it is
probably expected by many complainants that they can rely on it”. The establishment of the
Competition and Consumer Protection Commission marks a further development in the
consumer law regulatory framework and it is hoped that this will further enhance the
delivery of protections for Irish consumers.
Notwithstanding all of these significant domestic developments, Irish consumer law remains
closely linked to Europe. Understanding the European legal agenda is important because
what appears on this agenda today will, within a relatively short time, become part of Irish
law. Understanding the consumer policy agenda is important too, not least because not all
aspects of the policy agenda will always be in Irish interests, in which case, efforts to reshape the policy agenda may be needed.
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This paper will set out, in brief, the contemporary European consumer policy agenda and
will then examine the consumer law directives which will coming up for transposition over
the next 24 months – concentrating on three of particular significance – the ADR/ODR
package; the Mortgages Directive and the Bank Accounts Directive.
The European Consumer Policy Agenda
The European consumer policy agenda developed slowly after the Treaty of Rome 1957 and
really only began to become established in the mid-1980s. The bulk of Community
Directives in this early phase of development were minimum harmonising Directives,
requiring Member State transposition and harmonising consumer laws in Member States to
a designated minimum level only. The policy imperative behind legislation was very clearly
economic in nature with consumer protection being regarded as a necessary element in the
growth of the single market and all directives were introduced under the auspices of the
market integration elements of the Treaty. Although the European Community was
accorded a specific consumer protection competence beyond market integration in the
Maastricht Treaty (1992), the economic basis for consumer protection has continued
although in the last couple of years, there are some signs emerging of a broader basis for
consumer protection.
Although the policy basis for legislative intervention remained unchanged post-Maastricht,
at a legal level, there was a change. The Commission had become increasingly concerned
about the impact of minimum harmonising directives on competition – with consumer
protection being used as a form of ‘gold-plating’ and effectively reducing entry into
domestic markets. This problem was combined with other factors which the Commission
considered reduced the effectiveness of the consumer protection agenda from an economic
growth perspective. These factors included the poor quality drafting of the legislation and
the patchy implementation across members states. As a result, beginning in the mid-2000s,
the Commission began to move towards the adoption of maximum harmonising directivessetting the maximum level of protection to be afforded and prohibiting member states from
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exceeding this. Measures introduced during this phase included the Unfair Commercial
Practices Directive; the Consumer Credit Directive; and the Payment Services Directive.
While there are undeniable benefits to maximum harmonisation from a competition
perspective, from a consumer protection perspective, the benefits are less clear. This is
especially true for consumers from members states with more developed consumer
protection regimes but even more generally, there is a problem because maximum
harmonisation represents a ‘one size fits all’ approach and limits the capacity of member
states to respond to the specific needs of consumers within their own jurisdictions.
Many of the concerns around maximum harmonisation came to the fore in the negotiations
around the Consumer Rights directive in which Ireland, among other member states, began
to assert the importance of existing consumer rights in Ireland which would be removed if
the measure as proposed were brought into force. The extensive proposals were ultimately
jettisoned and the final measure is much more restricted than the original proposal. In
addition, in place of the wide-ranging proposals, the Commission has been working towards
the development of a common European sales law, intended to apply in cross-border
contexts. However, progress has been slow – and the final fate of this harmonisation
remains unclear. It seems that the Commission has learned some lessons from the
controversies around Consumer Rights directive and as will be seen in the discussion of the
new directives below, although directives still tend to be maximum harmonising, there is
typically quite extensive scope s for member state derogation.
The contemporary European consumer protection policy agenda is outlined in Commission
Communication, A European Consumer Agenda—Boosting confidence and growth which
was issued in 2012. This would seem to show some degree of shift in emphasis away from a
solely economic underpinning policy to include some elements of broader social justice aspects of the Bank Accounts directive, to be discussed below, reflect this shift. The current
policy priorities are: enhancing consumer safety; enhancing consumer knowledge; and,
improving implementation, stepping up enforcement and securing redress. The sectors
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which have been identified for specific attention are: the digital sector; the financial services
sector; the energy sector; misleading environmental claims; and, transport.
ADR Directive and ODR Regulation
Improving consumer access to redress has been on the EU consumer radar for over two
decades. However, progression of the agenda has come through non-binding
recommendations in the first instance, followed in the ADR context by a binding directive
and in the ODR context by a directly-effective regulation. While most of the discussion will
focus on these, it is worth noting that in 2013, the Commission issued a non-binding
recommendation on Collective Redress (Recommendation C (2013) 3539/3) accompanied
by a Commission Communication (COM (2013) 401 final).
The Collective Redress Recommendation states that collective redress procedures should be
fair, equitable, timely and not prohibitively expensive and that collective redress claims
should be “opt-in” rather than “opt-out”. The Recommendation also indicates that
national collective redress systems should contain certain procedural safeguards. These
include that contingency fees should not be permitted, or, if exceptionally permitted in a
Member State, these fees should be subject to appropriate national regulation, that
compensation awarded should not be punitive, that representative entities should be nonprofit making, that there should be a direct relationship between the objectives of the entity
and the rights that are alleged to have been violated, and that it should be verified at the
earliest possible stage of litigation that manifestly unfounded cases are not continued.
Additionally, it is recommended that parties should be encouraged to settle disputes
collectively, consensually or through appropriate means.
If the legislative trajectory follows the norm in this area, it may reasonably be expected that
a directive on Collective Redress will be following within the next couple of years.
Moving on to alternative dispute resolution (ADR) and online dispute resolution (ODR). The
encouragement of ADR as a means of settling consumer disputes has been part of
European policy for the past decade or so and the ADR Directive (Directive 2013/11 on
alternative dispute resolution for consumer disputes [2013] OJ L 165/63) was finally
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published in June 2013. The final date for transposition of this directive is 9 July 2015 and in
June 2014, the Department of Jobs, Enterprise and Innovation published a consultation
paper on transposition. The paper notes the limited awareness of ADR among Irish
consumers (citing a National Consumer Agency study which found that 56% of Irish
consumers were unaware of out-of-court procedures for settling consumer disputes) and
also the limited number of sectors in which ADR procedures currently exists. The currently
reported ADR schemes (as required by the European Commission) are: The Financial
Services Ombudsman, the Office of the Pensions Ombudsman, the Scheme for Tour
Operators, Chartered Institute of Arbitrators, the Advertising Standards Authority of Ireland
(ASAI) and the Direct Selling Association of Ireland. In fact however the latter two bodies
are really not ADR entities.
The stated purpose of the ADR Directive is “to contribute to proper functioning of the
internal market” by ensuring that consumers can submit complaints against traders to
“entities offering independent, impartial, transparent, fast and fair alternative dispute
resolution procedures”. This is achieved in two ways – first the ADR directive requires
member states to ensure the availability of ADR; secondly, the directive imposes procedural
requirements for the operation of ADR. Unusually, for a contemporary consumer measure,
the ADR directive does not impose the upper limits of protection but allows member states
to introduce rules which go beyond those laid down in the directive. Accordingly, there is
quite a degree of Member state discretion – and this is evident in the questions put in the
Consultation paper.
Availability/Accessibility
The ADR Directive applies to procedures for the resolution of both domestic and crossborder disputes between consumers and traders “concerning contractual obligations”
stemming from sales contracts/services contracts through an ADR entity “which proposes or
imposes a solution or brings the parties together with the aim of facilitating an amicable
solution”. Both binding and non-binding ADR is covered and it is left to the competence of
Member States to determine whether ADR entities in their territories have the power to
impose a solution on the parties. The Directive is also stated to be without prejudice to
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national legislation which makes participation in ADR mandatory, provided that this
legislation does not prevent parties from exercising their right of access to the judicial
system. So for example, the ADR directive does not change existing frameworks such as the
Financial Services Ombudsman or the Pensions Ombudsman.
Art 5 (1) of the ADR directive requires member states to facilitate access by consumers to
ADR procedures and to ensure that disputes covered by the Directive can be submitted to
an ADR entity which complies with the requirements of the Directive. This obligation may
be fulfilled by ensuring the existence of a residual (or “catch-all”) ADR entity which is
competent to deal with disputes which are not covered by an existing ADR entity and/or by
relying on ADR entities established in another Member State or on regional, transnational or
pan-European dispute resolution entities. One of the questions asked in the consultation
document is whether there are currently an existing body to cover the lacuna in ADR
coverage. I would suggest that there is not – ADR remains sector-specific and the Small
Claims Procedure (which may be considered to be ADR) is very restrictive is scope (limit of
€2000). Thus, one might assume the need for development of new ADR mechanisms in
order to meet this aspect of the ADR directive.
In terms of accessibility of schemes, the ADR directive requires Member States to ensure
that ADR entities accept both domestic and cross-border disputes, including disputes
covered by the ODR Regulation (discussed below). However, member states may at their
discretion, permit ADR entities to maintain/introduce procedural rules which allow them to
refuse to deal with a given dispute on any/all of the following grounds:

The consumer did not attempt to contact the trader concerned and seek as a first
step, to resolve the matter with the trader

The dispute is frivolous or vexatious

The dispute is being/has previously been considered by another ADR entity or by a
court

The value of the claim falls below/above a pre-specified monetary threshold
(although these must not be set at a level which would significantly impair access to
ADR)
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
The consumer has not submitted the complaint to the ADR entity within a prespecified time limit (which must not be less than one year from the date on which
the consumer submitted the complaint to the trader)

Dealing with such a type of dispute would otherwise serious impair the effective
operation of the ADR entity
The Departmental consultation document has asked which if any of these permitted
grounds of refusal should be used. Member states may also permit ADR entities to
prescribe minimum and maximum monetary thresholds. The service must be provided
either free to consumer or at a minimal cost.
The ADR directive does not require mandatory participation by traders in ADR – although –
as noted above- it does allow member states to do so. So one of the questions in the
consultation is whether this approach (as for example applies in respect of financial
services) should be adopted across the board. Art. 13 of the ADR directive does require
however that where traders are covered by an ADR scheme, they must be required to
inform consumers about the applicable ADR entity/ies, including relevant websites on the
trader’s website and in the general terms and conditions of sale or service contracts.
Procedural Requirements
In terms of quality requirements for ADR, the directive outlines a set of standards which all
ADR entities must meet. In brief these relate to

Expertise, independence and impartiality (Art. 6)
The natural persons in charge of ADR processes must possess the necessary knowledge and
skills in the field of ADR as well as a general understanding of the law.

Transparency (Art. 7)
ADR entities must make designated information available on their websites, on a durable
medium if requested and by any other means they consider appropriate. The information
must be clear and easily understandable and must include:
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o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
Contact details
A statement that the ADR entity is listed
Names of natural persons in charge of ADR, the method of their appointment and
the length of their mandate
A statement regarding expertise and impartiality
Membership of ADR networks facilitating cross-border dispute resolution, if
applicable
Types of disputes they are competent to deal with and any applicable thresholds
Procedural rules governing the resolution of a dispute and grounds on which the
ADR entity may refuse to deal with a dispute
The language in which complaint may be submitted and the language in which the
procedure is conducted
The types of rules the ADR entity may use for the resolution of the dispute
Any preliminary requirements before ADR may be commenced
Whether the parties can withdraw from the procedure
The costs, if any, to be borne by the parties, including the rules on awarding costs at
the end of the procedure
The average length of the ADR procedure
The legal effect of the outcome of the procedure, including the penalties for noncompliance with a binding decision
The enforceability of the ADR decision.
ADR entities must also provide annual activity reports, containing designated information.

Effectiveness (Art. 8)
ADR procedures must be effective and must be available online and off-line to both parties.
The procedure must be available without the obligation to retain a lawyer but it must not
deny to the parties their right to independent advice or third party representation. The
outcome of the ADR procedure must be made available within a period of 90 calendar days
from the date on which the ADR entity received the complete complaint file. However,
provision is made for extension of this 90 day period by the ADR entity in the case of a
“highly complex dispute”. In the event of such extension, the parties must be informed of
the extension and of the expected length of time for resolution.

Fairness (Art. 9)
The parties to the ADR procedure must be able to express their point of view within a
reasonable period of time after being provided with relevant documentation. They must be
informed that they do not need legal representation but that they may use this or other
third-party advice and they must be informed of the outcome of the ADR procedure in
writing or on another durable medium and be provided with the grounds for the outcome.
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
Liberty (Art. 10)
Any agreement between a consumer and a trader to submit all disputes to an ADR entity
may not be made binding on the consumer if the agreement was concluded before the
dispute materialised and if it has the effect of depriving the consumer of his or her right to
take legal action in the courts. Where a procedure is binding on the parties, they must be
informed in advance of this and must have specifically accepted this.

Legality (Art. 11)
Where the ADR procedure aims to impose a solution in circumstances where there is no
conflict of laws, the solution must not deprive the consumer of the protections afforded him
by provisions which cannot be derogated from by agreement under the laws of the member
state where the consumer and the trader are habitually resident.
A further procedural point to note is that the ADR directive requires that where parties
choose to use a (non-binding) ADR procedure, this should not prevent them from bringing
an action before the courts as a result of expiration of limitation periods during the ADR
procedure. The Consultation paper states that the State will provide for a stay on
limitations periods in order to accommodate resolutions covered by the ADR directive.
Giving Effect to the ADR Regime
Every member state must designate at least one competent authority and communicate the
name of this to the Commission which will then publish a list of all competent authorities
across member states. It might reasonably be assumed that the competent authority for
Ireland with be the Competition and Consumer Protection Commission although it may be
the case that the Central Bank will also be designated as a competent authority (reflecting
the split in regulatory agencies between goods and services/financial services. The
designated competent authority must assess whether each ADR entity means the
procedural requirements under the ADR directive and then compile a list of qualifying ADR
schemes for transmission to the Commission.
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Art. 21 of the ADR directive also requires member states to provide for the imposition of
effective, proportionate and dissuasive penalties for traders in respect of the consumer
information requirements imposed on traders
ODR (online dispute resolution)
ODR is essentially ADR but using internet technology. Technology can play a range of roles –
including facilitating easier communication but also playing a more active role in the
negotiation/solution process. Indeed, advocates of ODR sometimes refer to technology – as
the fourth party (in addition to the mediator and parties) to a resolution process.
Technology can be used at each stage of the process. At negotiation phase, the entire
process can be automated. For example, one commonly used form of ODR is double blind
bidding – where each party makes offers and these offers are revealed to the other side
only when the difference between the offers falls within a pre-set limit. It is also argued by
advocates of ODR that technology in the form of language use/web interfaces can be used
as a way of facilitating a more constructive communication and facilitate settlement.
From an EU consumer policy perspective, the main attraction of ODR is that it provides
some means of facilitating cross-border dispute resolution. While the ECC has been quite
effective, the legal framework (European Communities (Small Claims Procedures)
Regulations 2008) has not. The lack of effective cross- border dispute mechanism limits
market integration and slows the growth of the single market.
Regulation 524/2013 on ODR (the ODR Regulation) [2013] OJ L 165/1 is the Commission’s
attempt to address this difficulty. The Regulation (which is directly effective) operates
alongside the ADR directive as transposed and provides for a platform for ODR. It should be
remembered that although the platform is online, it is not restricted to online disputes.
The platform will be developed by the Commission; testing is to begin in January 2015 and
the platform must become operative from January 9 2016. The platform must be userfriendly and must respect the privacy of users at all stage in the process. Each EU member
state must nominate one ODR contact point and inform the Commission of this – this may
be the European Consumer Centre in the state. Each ODR contact point must have at least
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two ODR advisors. The contact point must support the process, including assisting on the
completion of the complaint submission.
Under the ODR Regulation, all complaints must be submitted electronically and if the form is
not fully completed, it must be returned to the complainant. The form will be drawn up in a
way to facilitate easier negotiation. Once completed, the complaint is transmitted by the
ODR platform to the respondent together with information on the ADR entities competent
to deal with the complaint (recall that under the ADR directive, all member states are
required to have appropriate ADR entities available). The complainant trader affirms
whether and which entity it will (or is obliged to) use. This information is then
communicated by the ODR platform to the complainant and the ADR entity. The ADR entity
must inform the parties without delay if it will deal with the dispute and must then reach a
resolution within 90 days. If the parties cannot agree on an ADR entity within 30 days, the
ODR aspect of the process comes to an end and the complainant will be advised to contact
the ODR advisor in the member state for alternative forms of seeking redress.
All online traders – regardless of whether they use ODR – will be required to provide a link t
the ODR platform.
Mortgages Directive
Directive 2014/17/EU on credit agreements for consumers relating to residential immovable
property (the Mortgages directive) [2014] O.J. L. 60/34 was published in March 2014 and
must be transposed by 21 March 2016. Thus, the Mortgages directive comes into effect
post-financial crisis and reflects some of the lessons learned from the crisis. The proposal
was underpinned by a series of studies of the European mortgages market. Nonetheless, it
proved highly controversial with particular concerns being raised about information
overload and excessive intervention in the buy-to-let mortgage market. A compromise
proposal was put forward during the Irish Presidency of the Council of the EU and this
ultimately provided the basis for the Mortgages Directive.
Reflecting the compromise nature of the final measure, the Mortgages Directive is a
maximum harmonising measure but only to a very limited degree. Article 2(1) states that
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the “directive shall not preclude Member States from maintaining or introducing more
stringent provisions in order to protect consumers, provided that such provisions are
consistent with their obligations under Union Law”. Additionally, many of the substantive
provisions in the Directive leave extensive Member State discretion regarding how the
protections provided for are to be delivered in the Member State.
However, Member States are restricted in one respect - they are precluded from
maintaining or introducing provisions diverging from the designated requirements in
respect of the European Standardised Information Sheet (ESIS).
Reflected the range of transposition choices, in September 2014, the Department of Finance
published a public consultation. As well as specific questions on individual aspects of the
transposition, questions asked include whether Ireland should introduce more stringent
measures than those in the directive.
Scope of Directive
The Mortgages Directive applies to:
(a) Credit agreements which are secured either by a mortgage or by another
comparable security commonly used in a Member State on residential immovable
property or secured by a right related to residential immovable property; and,
(b) Credit agreements the purpose of which is to acquire or retain property rights in
land or in an existing or projected building.
Designated agreements are excluded from the ambit of the Directive. These are:






Certain equity release credit agreements;
Credit agreements where credit is granted by an employer to employees as a
secondary activity where the credit is free of interest or at a lower APRC (annual
percentage rate of charge) than the prevailing market rate and not offered to the
public;
Credit agreements where the credit is free of interest/charges other than recovery
costs directly related to the securing of the credit;
Credit agreements in the form of an overdraft where the credit must be repaid
within one month;
Credit agreements which are the outcome of a settlement reached in court or before
another statutory authority;
Credit agreements which relate to the deferred payment, free of charge of an
existing debt and which are not secured by a mortgage or other comparable security
over residential immovable property.
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In addition, Member States may decide not to apply the Directive to the following
agreements:
 Buy-to-let mortgages;
 Credit agreements relating to credit granted to a restricted public under a statutory
provision with a general interest purpose, free of interest or at lower borrowing
rates than those available on the market
 Bridging loans;
 Credit agreements with non-profit mutual societies
However, in respect of these agreements, an alternative framework must be put in place,
the details of which are at the discretion of the member state
Member States may also decide to apply the information requirements in Directive
2008/48/EC (transposed into Irish law by the European Communities (Consumer Credit
Agreements) Regulations 2010 (SI No 281 of 2010) rather those in Directive 2014/17/EU to
credit agreements for consumers, secured by a mortgage or other comparable security
where the purpose of which is not to acquire or retain the right to residential immovable
property.
Information
Article 11 outlines standard information to be including in advertising, including specified
standard information which must be included in any advertisement and Article 13 outlines
required general information which must be made available by creditors or, where
applicable, by tied credit intermediaries.
In order to facilitate cross-EU comparison mortgage shopping, Art. 14 introduces the
requirement for provision of pre-contract information which must be provided as specified
in the ESIS (which is set out in Annex II of the Directive). This requirement (and the
presentation requirements for the ESIS) may not be varied by Member States except in so
far as in permitted in Annex II. The main issue regarding the ESIS to be determined on
transposition is whether the ESIS should be provided before a binding offer
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The Mortgages Directive also imposes a positive obligation on Member States to ensure that
creditors/credit intermediaries/appointed representatives are required to provide
“adequate explanations” to the consumer in relation to the proposed credit agreement and
any ancillary service so as to enable the consumer to assess whether the proposals are
adapted to his/her needs and financial situation.
Withdrawal/Reflection Period
There must be a 7 day period during which consumers may assess and compare offers.
Member states are offered a choice as to whether this is a reflection period before the
conclusion of the agreement or a withdrawal period following the conclusion of the
agreement. The question on transposition is which Ireland should adopt and whether if a
reflection period is adopted, the consumer should be permitted to accept the offer within
the reflection period.
Limits on Tying Practices
Article 12 requires Member States to prohibit tying practices subject to a number of
permitted exceptions. Tying is defined as “the offering or the selling of a credit agreement
in a package with other distinct financial products or services where the credit agreement is
not made available to the consumer separately.” There are a number of possible
permissible tying arrangements – at the discretion of member states.
Member States may permit creditors to request the consumer/his or her family member or
close relation to:



Open or maintain a payment or saving account, where the only purpose of the
account is to accumulate capital to repay the credit, to service the credit, to pool
resources to obtain the credit or to provide additional security for the credit
Purchase or keep an investment or private pension product, where the product
which primarily offers the investor an income in retirement, serves also as an
additional security for the creditor in the event of default or to accumulate capital to
repay the credit
Conclude a separate credit agreement in conjunction with a shared-equity credit
agreement to obtain credit.
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Creditworthiness/Suitability Requirements
Reflecting the increased significant of responsible lending in European consumer credit
policy, the Mortgages Directive requires Member States to introduce requirements to check
creditworthiness and to ensure reliable valuation standards for residential property.
Member States must ensure that, before concluding a credit agreement, the creditor makes
a thorough assessment of the consumer’s creditworthiness, taking appropriate account of
factors relevant in verifying the prospect of the consumer being able to meet his or her
obligations under the credit agreement. The assessment must be carried out on the basis of
information on the consumer’s income and expenses and other economic circumstances
which is “necessary, sufficient and proportionate” and it must not rely predominantly on the
value of the property exceeding the amount of the credit or the assumption that the
property will increase in value.
Member States are required to ensure that the creditor only makes credit available to the
consumer where the result of the creditworthiness assessment indicates that the consumer
will be able to meet the obligations in the credit agreement. This would require an
extension of the current requirement under Consumer Protection Code 2012 which requires
only that creditors should “take account” of the affordability assessment carried out.
Member States are also required to ensure that reliable residential property valuation
standards are developed within their territory and to require creditors to ensure that these
standards are used in carrying out valuations.
Advisory Services
New requirements are introduced for “advisory services”. These are defined as “the provision
of personal recommendations to a consumer in respect of one or more transactions relating
to credit agreements and constitutes a separate activity from the granting of a credit and
from credit intermediation activities as defined. Member States must ensure that
creditors/credit intermediaries/appointed representatives explicitly inform the consumer, in
the context of any given transaction, whether advisory services are being, or can be,
provided to the consumer and must ensure that before the provision of the services (or the
conclusion of the contract to provide the services), designated information is provided to
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the consumer. This information must include whether any recommendation will be based
on consideration only of the advisor’s own product range or a wide range of products from
across the market and, where applicable, the fee charged to the consumer or, where this
cannot be ascertained at the time, the method used for its calculation.
Right to Early Repayment
Member States are required to ensure that consumers have the right to discharge fully or
partially the obligations under a credit agreement prior to the expiry of the agreement and
to ensure that consumers are entitled to a reduction in the total cost of the credit,
consisting of the interest and the costs for the remaining duration of the contract. Member
States are, however, permitted to introduce conditions for the exercise of the right to early
repayment. These may include time limitations on the exercise of the right; a different
treatment depending on the type of borrowing rate or the time (referred to as the
“moment”) the consumer exercises the right, or restrictions with regard to the
circumstances in which the right may be exercised. Member States may allow for “fair and
objective” compensation for the creditor in the event of early repayment; however, this
must be restricted to “possible costs directly linked to the early repayment” and cannot
include the imposition of a sanction on the consumer.
Arrears and Foreclosure
Reflecting a new recognition of the relevance of arrears issues to European consumer credit
policy, Art. 28(1) introduces a requirement for Member States to adopt measures “to
encourage creditors to exercise reasonable forbearance before foreclosure proceeding are
initiated”. Although the concept of “foreclosure” no longer exists in Irish law, this provision
might reasonably be interpreted to mean actions for repossession more generally. Member
States are also permitted to require the creditor to restrict charges on default to charges no
greater than those required to compensate the creditor for costs incurred as a result of the
default and to cap any additional charges imposed by creditors in the event of default.
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Bank Accounts Directive
Directive 2014/92 on Comparability of Fees relating to Payment Accounts, Payment Account
Switching and Access to Payment Accounts with Basic Features, [2014] O.J. L257/214 came
into effect in September 2014 and must be transposed by 18 September 2016 although
some aspects have an earlier start date.
The directive has three key aims: to facilitate comparability of bank account fees, thus
allowing for consumer comparisons; to facilitate switching between payment accounts; and
to provide access to basic payment accounts. The first two aims fit within the classic marketdriven vision of consumer protection, protecting consumers through the facilitation of
competition between service providers. The third aim of the proposal is more in line with a
broader vision of consumer protection as a matter of social justice.
The Directive applies to “consumers” defined in the traditional way. The first aim of the
Directive (ensuring the comparability of account fees) is delivered in stages. First, each
Member State must compile a list of at least 10 and no more than 20 of the most
representative services linked to a payment account. The list must be notified to the
Commission and the European Banking Authority (EBA). The EBA must then draft regulatory
technical standards setting out standard terminology across Member States, which must
then be integrated into the list for each Member State. This must then be published with
the corresponding fee in the form of a “Fee Information Document”, which must be
provided to consumers prior to opening a bank account. Member States must also ensure
that consumers have access to at least one fees-comparison website.
The second aim (facilitating switching) is achieved, first, through a requirement for all
Member States to ensure that a switching service is provided by payment services
providers. Steps must also be taken to ensure that information necessary to facilitate
account switching must be provided free of charge by providers to consumers, and any fees
for transferring payment services must be “reasonable” and in line with the actual costs to
the payment service provider. Most of these requirements are already covered by the
Central Bank Code of Conduct on Switching Accounts.
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The third aim (access to services) aim is delivered, in the first instance, by a requirement
that there may be no discrimination in applying for or accessing a payment account
between consumers legally resident in the European Union on the grounds of nationality or
place of residence. Additionally, all Member States must ensure that at least one payment
service provider in their territory offers a payment account with basic features to consumers
and that this is not offered by a provider with solely online banking facilities. Services on this
account must be made available to consumers free of charge or for a reasonable
fee.
Conclusion
In conclusion, to mention some other relevant measures in brief.

The European Union (Protection of Consumers in respect of Timeshare, Long-Term
Holiday Product, Resale and Exchange contracts (Amendment) Regulations 2014 (SI
No 400 of 2014) came into effect in September 2014. In brief, these Regulations
permit a consumer to terminate a long-term holiday product contract after receiving
a request for a second instalment payment. Note that a long-term holiday contract is
a contract of a duration of more than one year under which a consumer, for
consideration, acquires primarily the right to obtain discounts or other benefits in
respect of accommodation.

While MiFID (Markets in Financial Instruments Directive) is not a consumer
protection measure as such – its protective elements apply to retail clients (which is
a broader category but which includes consumers), the measure has a strong
consumer protection aspect so an awareness of forthcoming developments is useful.
MiFID II (which comprises a Directive 2014/65and Regulation 600/2014) was
adopted this year. MiFID II must be transposed by July 3 2016 and applied from Jan
3 2017.
In brief, from a consumer (retail client) protection perspective, the main changes to
be aware of in MiFID II are the new requirements introduced for firms when
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providing investment advice –including whether the advice is provided on an
independent basis and the basis on which the advice is formulated (issues which are
now covered in CPC 2012); the strengthening of the suitability assessment
requirements and the limitations to the execution only exemptions.

Payment Services II. There has been ongoing work on the development of a new
payment services directive (PSD II). The Commission published a proposal in this
respect in 2013. The proposals are for a package of measures a new directive and a
regulation. Among the main measures in the package from a consumer protection
perspective are: a narrowing of the current exemption for digital content and the
deletion of the current exemption for independent ATM services.
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