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Brokers accuse banks of flouting rules
Wednesday, 23rd May 2012 12.08pm

Irish banks are flouting consumer protection laws by monitoring account transactions and using the information to pressure consumers into switching over to their products, according to brokers' organisation, PIBA.

A new survey to be released at the AGM of PIBA tomorrow has found that 76pc of brokers are reporting that consumers are being pressured to take out in-house products with banks to maintain overdraft and other loan facilities.

They also allege that consumers' account transaction details, such as direct debits payable to other institutions, are being targeted to persuade consumers to switch to in-house products.

PIBA's Chief Executive Diarmuid Kelly says: "These are illegal practices. The banks are flagrantly violating consumer protection laws and pressurising consumers who feel they have little choice because their credit facilities could be curtailed or withdrawn."

"Because of the surreptitious nature of the pressure being applied and the uneven nature of the relationship, which is particularly acute given the economic situation, consumers are loath to report such practices for fear of the financial consequences for themselves."

PIBA recently met the Data Protection Commissioner on the issue who confirmed the practices amount to breaches of the Data Protection laws.

Kelly said PIBA members are also hearing of cases where certain banks are making the acquisition of one product contingent on another product being taken out, a clear breach of the Consumer Protection Code.

Last year a Data Protection Commission report found, among other things, that: "in several institutions our investigations revealed marketing customers on the basis of information contained in their direct debits, such as a monthly payment to another financial institution or a payment to the life branch of an insurance company." PIBA has now issued guidelines to its 850 member firms outlining the process for making formal complaints against the banks to either the Central Bank or the Data Protection Commissioner.

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