Denise DelaneyConsumer Information7 March 2008

What is the Financial Regulator’s role and remit?

Established 1 May 2003 Independent watchdog.

Responsible for the regulation of all financial services firms in Ireland.

Almost 13,000 financial services providers and collective investment schemes.

Financial Regulator

Our Main Tasks

To help consumers make informed financial decisions in a safe and fair market; and

To foster sound, growing and solvent financial institutions which give consumers confidence that their deposits and investments are secure.

Consumer Protection Code

Consumer Protection Code introduced on 25 July 2006 - set of standards and rules that financial services firms must follow when providing a financial product or service, or giving financial advice.

Copy available on www.financialregulator.ie

Consumer Information - “IT’S YOUR MONEY” Initiative Independent information in plain English to help you,

the consumer, to shop around for best value & most suitable product.

Consumer Helpline - Mon-Fri 8-8 1890 77 77 77

Information Centre, 6-8 College Green, Dublin 2 Mon – Fri 9.30-5

www.itsyourmoney.ie - consumer website consumerinfo@financialregulator.ie Consumer publications

Different types of lending products

Short Term Debts – payable within 1 year Overdrafts; Credit cards; Loans from moneylenders;Medium Term Debts – payable 1-5 years Personal Loans; Hire Purchase; Credit Union Loans;Long Term Debts – payable over 10-40 years Mortgages.

Your credit rating

This is a record of your borrowing past and present.

Lenders send info. on your debts to the Irish Credit Bureau.

Info. stays on the record for 5 years after the account has been closed.

Report available from www.icb.ie or 01 2600388 for €6.00.

Overdrafts

Your bank allows you to spend more money than you have in your account up to a certain amount.

Available to current account holders. Interest charged on the amount you are

overdrawn. Account must go into credit for at least 30 days

in the year. May affect your free transaction fee status. See our Personal Current Account online survey

for up to date Overdraft Rates.

Sample of rates charged on authorised overdrafts from Personal Current Account Online Survey @ 26/2/08

AIB 15.91%BOI 15.2%Halifax 9.43%NIB (Easy) 10.1%NIB (Easy Plus) 9.75%PTSB 13.1%Ulster Bank 11.55%

Credit Cards

Credit card company lends you money which you spend through purchases or cash withdrawals.

Interest charged and interest free period differs for purchases and cash withdrawals.

Must make minimum repayment each month. Stamp duty of €30 payable annually in arrears. No direct debits on credit cards – recurring debits. Your limit cannot be increased unless you request

it.

Sample of rates from Credit Card Online Survey @ 26/2/08

Lowest Rate for Purchases 9.4%Highest Rate for Purchases 19.1%

Lowest for Cash Advances 9.4%Highest for Cash Advances 20.7%

19 cards listed on our survey

Moneylenders

Moneylender must be licensed. Typically small loans but can be larger. APR is at least 23% - can be much higher. Can be door to door moneylenders, or

companies, e.g. mail order companies. Cannot charge extra interest or charges,

e.g. if you miss payments. List of moneylenders available on

www.financialregulator.ie.

Personal Loans

Borrow between €1,000-€50,000 for a set period. Normally up to 5 years but in some cases up to 8 years.

Variable or fixed rates available. Monthly repayments. Compare loans using APR. Normally unsecured. But lender can request

security, e.g. for student loans. Arrangement or set up fee, security fee, penalty

fees. Unsolicited pre-approved credit is prohibited.

Sample of rates from Personal Loan Online Survey @ 26/2/08Fixed Rates

€13,000 over 3 year – lowest Fixed Rate

6.9% APR €399.79 per month Total repaid=

€14,392.44

€13,000 over 3 year – highest Fixed Rate

10.8% APR €418.87 per month Total repaid =

€15,154.32

Sample of rates from Personal Loan Online Survey @ 26/2/08 Variable Rates

€13,000 over 3 year – lowest Var. Rate

8.4% APR €407.97 per month Total repaid=

€14,686.92

€13,000 over 3 year – highest Var. Rate

13.25% APR €434.99 per month Total repaid =

€15,659.46

Credit Union Loans

Must be a member of the CU. To be a member you must fall within the

common bond, i.e. live or work in the same area or for same employer.

Must have the no. of shares required by the CU to qualify for a loan.

Weekly, fortnightly or monthly repayments. No fees. Interest rebates – CU may refund some

interest paid by members each year.

Hire Purchase

Normally offered by shops, garages and some lenders as car finance.

Repaid over fixed term. Lender owns the goods until the debt is repaid.

Therefore goods can be repossessed and you cannot sell them without owner’s consent.

APR not stated on HP agreement. Hire purchase price = cost of goods + interest + fees.

Example: car price €13,300, 5 year HP agreement Cash Price €13,300 Less deposit/trade-in € 400 Amount for finance €12,900 Plus interest € 3,972.60 Plus fees (doc & comp. Fee)€ 126.90 Hire Purchase Price €17,399.50

Hire Purchase

To end agreement you must pay half the HP price less payments made to date and return the goods.

You can repay all the HP price early and own the goods. Goods can be repossessed. Less than 1/3 paid no legal

action required to repossess. If you take the car abroad, you are required to notify the

owner (lender) before doing so. Check if a car has outstanding HP debt – Hire Purchase

Information Ltd 01-2600905

Example: to give back car in month 25 Half HP Price €8,699.75 Less 25 payments €6,915 Less deposit € 400 Less fees paid €63.45 Amount due €1,321.30 Difference between what was paid and

half the HP price.

Example: to buy car in month 25

HP price €17,399.50 Less 25 payments € 6,915 Less deposit € 400 Less fees paid € 63.45 Still owes €10,021.05 Plus completion fee € 63.45 Less interest rebate € 746.14 Total to be paid € 9,338.36

Payment protection insurance (PPI)

This is an optional add-on to a loan or credit card.

No charge for life cover with credit union loans.

May provide cover if you:die, are permanently disabled;are made redundant.

What is not covered under PPI?

Only specified illnesses are covered. Stress or back injury may not be covered.

Part-time, self-employed or workers in a family business are exempt from redundancy claims.

You cannot claim for redundancy in first 3-6 months of policy.

Do you need PPI?

Do you pay your Credit Card balance off every month?

Are you in part-time or contract work? Are you self-employed? Will you be paid by your employer if you are

on long-term sick leave? Are you in a job that is secure from

redundancy? Do you already have these type of policies?

Repaying debts early

Do a list of all outstanding debts you have, include:Mortgage,All loans - car, bank and credit union,Overdraft,Credit cards & store cards,Moneylender loans, incl. catalogue debt,Hire purchase.

Repaying debts early

Ask your lender for the following information:How long is left on the debt?What interest rate are you paying(APR)?How much would it cost to repay the debt

now?How much interest will you save if you repay

the debt now?Will you pay any penalties for repaying early?

Repaying debts early

Use the answers that you get to decide which debt you should repay first.

You can compare the return on your deposits to the savings you would make by repaying your debts.

Consumer Contact Details

www.itsyourmoney.ieConsumer Helpline 1890 77 77 77

consumerinfo@ifsra.ieInformation Centre, 6/8 College Green,

Dublin 2

Thank you

Any questions?