Poor protection for mortgage holders


Sir, – The report “Banks told not to add legal charges to mortgage arrears” (Business, October 31st) shows the poor level of consumer protection for mortgagors in Ireland.

Hopefully, none of these consumers lost their homes. That such unfair terms still exist in Irish mortgages, 25 years after the adoption of the EU Unfair Contract Terms Directive, is remarkable. This defined an unfair contract term as one which causes a significant imbalance in the parties’ rights and obligations, to the detriment of the consumer. The directive prohibits such unfair terms in mortgages.

The High Court, this year, reaffirmed that Irish courts, at all levels, in the course of proceedings, must examine such mortgage contracts of their “own motion,” and strike out such unfair terms. But the unfairness of the situation is often compounded when it is left to distressed borrowers (often without legal assistance) to raise these terms in courts, to the consternation of bank lawyers and some judges. This report shows that many are justified in their complaints. But it is a shabby and careless way to apply EU consumer law protection.

The ECB has confirmed that the Central Bank of Ireland is responsible for ensuring compliance with this directive, as it applies to mortgages, in Ireland. It can refer such mortgage terms to the courts for a definitive ruling, but has never done so.

Of course, the Central Bank could take a proactive approach to this issue of unfair terms in Irish mortgages, request copies of all standard mortgages used by Irish lenders, and examine these for unfair terms.

Perhaps, Brian Hayes of the Banking and Payments Federation of Ireland would encourage his members to comply with such a request, and facilitate these EU consumer rights for Irish consumers. – Yours, etc,


Senior Lecturer,

School of Law, NUI Galway.