Pearse Doherty (Donegal, Sinn Fein)
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84. To ask the Minister for Finance if his attention has been drawn to the clause (details supplied) now contained in some updated mortgages; if he or the Central Bank is of the view that such a carte blanche exemption from liability is within the spirit of the codes of conduct; and if he will make a statement on the matter. [30533/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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It is the responsibility of regulated financial service providers in the first instance to satisfy themselves that the contracts they enter into with consumers are compliant with all relevant legal and regulatory requirements

A key legal provision is the EC (Unfair Terms in Consumer Contracts) Regulations 1995 (as amended). These Regulations apply to any term in a contract concluded between a seller of goods or supplier of services and a consumer which has not been individually negotiated.

The legislation is designed to protect consumers against unfair terms in particular when they enter into standard form contracts with traders and regulated financial services providers.  Contractual terms may be considered unfair where they cause a significant imbalance in the parties rights and obligations to the detriment of the consumer. In that context, it could be noted that Schedule 3 of the Regulations sets out an indicative and non-exhaustive list of terms that may be regarded as “unfair”. Some examples of contractual terms that may be considered unfair include:

- terms unreasonably limiting the liability of the trader or regulated financial services provider to the consumer;

- terms unreasonably restricting the rights of the consumer;

- terms unreasonably allowing the trader or regulated financial services provider to terminate or alter the contract or alter the product/services to be provided under the contract without recourse to the consumer; and

- terms which are not expressed in plain, intelligible language.

The legislation provides the Central Bank with powers to protect consumers from unfair contract terms where they relate to regulated financial services providers such as banks, insurance companies and retail intermediaries. Under the legislation, certain supervisory powers are available to the Central Bank to ensure compliance with the legislation by regulated financial services providers. These powers mean that the Central Bank may require amendments to consumer contracts. In certain circumstances, the Central Bank may seek a court order preventing the use of contract terms that are considered to be unfair or use other regulatory tools, including the Administrative Sanctions Procedure, to combat the use of unfair contract terms in consumer contracts.

The Central Bank Consumer Protection Code 2012 (the Code) will also be relevant. The Code provides that a regulated entity must ensure that in all its dealings with customers and, within the context of its authorisation, it acts honestly, fairly and professionally in the best interests of its customers and the integrity of the market. In particular, provision 3.8 of the Code provides that a regulated entity must not, in any communication or agreement with a consumer (except where permitted by applicable legislation), exclude or restrict, or seek to exclude or restrict:

- any legal liability or duty of care to a consumer which it has under applicable law or under the Code;

- any other duty to act with skill, care and diligence which is owed to a consumer in connection with the provision to that consumer of financial services;

- any liability owed to a consumer for failure to exercise the degree of skill, care and diligence that may reasonably be expected of it in the provision of a financial service.

Chapter 10 of the Code also sets out the framework to deal with any complaint a consumer may have with a regulated entity. 

The Central Bank has advised that it is difficult to comment further on the above mentioned clause based on the limited information provided. However, the Bank has indicated that should the Deputy provide them with additional information they will consider the matter further.