Latest Central Bank of Ireland Consumer Protection Bulletin highlights key trends in personal credit products

OREANDA-NEWS. March 16, 2016. The Central Bank of Ireland’s second Consumer Protection Bulletin, published today, highlights a decrease in the outstanding value of credit card and personal loan accounts.

Director of Consumer Protection, Bernard Sheridan, said: “This Bulletin provides us with an overview of the personal credit market, and gives some interesting insights into trends we will continue to monitor such as decreasing credit card and personal loan values, falling arrears, increase in the sale of personal loans and the continued issues of account administration and processing complaints.”

The Bulletin highlights several key trends, including:

• The number of credit card accounts has declined by almost 16% over the past five reporting periods since H2-2013[1].
• The outstanding value of credit card and personal loan accounts has decreased over the reporting period, with a 17% decrease in credit card account value and a 13% decrease in the amounts outstanding on personal loans since H2-20131;
• Both the number of credit card and personal loan accounts in arrears has decreased by 33% in the period H1-2014 to end H2-2015.  On the other hand, there has been a slight increase in the number of credit card accounts in arrears in H2 2015 compared to H1 2015; and
• The number of complaints received as a percentage of overall account numbers for both credit cards and personal loans stand at 0.63% and 0.98% respectively. General account administration and processing has been the highest area of complaint for the past 3 reporting periods for credit cards and for the past 4 reporting periods for personal loans. [2]

Notes to editors

About the data

These Consumer Protection Bulletins, covering different aspects of the market, have been developed as part of a commitment (first outlined in the Consumer Protection Outlook Report, 2015) to gather and monitor market intelligence and data returns from regulated firms. This data provides Consumer Protection with insights into existing and emerging consumer issues.

The trends complement statistical analysis developed elsewhere in the Central Bank. However, the reporting population and methodology differ from other Central Bank public reports. For instance, the data from the Consumer Protection Personal Credit Bulletin was collated from selected principal credit institutions offering personal credit accounts dating back to H2 2013.[3] The reporting firms were selected to be consumer risk-based representation of the market and the data relates to personal consumers, as defined in the Consumer Protection Code 2012, resident in the State only.

In relation to data on credit cards used in the Consumer Protection Personal Credit Bulletin, firms report on personal credit card accounts held by personal consumers; these include zero-balance accounts and inactive accounts. Credit card arrears reported relate to those accounts where the minimum repayment was not made by the due date. With regards to personal loans, firms reported on fixed and variable interest rate personal loans made to personal consumers acting outside their trade or profession. Personal loan arrears reported relate to those accounts where the full repayment was not made by the scheduled due date.

The Central Bank’s Statistics Division also publishes data on the number and value of credit cards, separately identifying personal and business cards, albeit these have different coverage and methodology. The Central Bank’s Statistics Division also publish data on value of loans to Irish households for house purchase, consumption and other purposes, again according to a different methodology as defined by the relevant ECB guidelines.