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Complaint to the European Commission: Systemic Barriers to the Effective Enforcement of EU Consumer Rights in Ireland

7 min read By ben

Submitted to

Directorate-General for Justice and Consumers (DG JUST)

European Commission

Copied to

Irish Government

  • Office of the Taoiseach
  • Minister for Justice
  • Minister for Finance
  • Office of the Attorney General

Irish State Institutions

  • Financial Services and Pensions Ombudsman
  • Central Bank of Ireland
  • Courts Service of Ireland
  • Legal Aid Board

Oireachtas

  • Joint Oireachtas Committee on Finance
  • Joint Oireachtas Committee on Justice

Judiciary (For Information Purposes Only)

  • Office of the Chief Justice
  • Office of the President of the High Court

European Institutions and Civil Society Organisations

  • Irish Members of the European Parliament
  • European Parliament Committee on Petitions (PETI)
  • European Consumer Centre Ireland
  • Free Legal Advice Centres (FLAC)
  • Law Society of Ireland
  • The Bar of Ireland

Subject: Systemic Barriers to the Effective Enforcement of EU Consumer Rights in Ireland for Mortgage Holders Facing Home Repossession

Dear Sir/Madam,

This Open Letter is formally addressed to the European Commission and simultaneously circulated to key institutions responsible for the administration, oversight, adjudication and protection of consumer rights in Ireland.

The purpose is not to criticise any individual institution, but rather to highlight the cumulative effect of multiple systemic barriers which, taken together, may prevent Irish mortgage holders from exercising rights guaranteed by European Union law in practice.

No single institution is solely responsible for these difficulties. Rather, the interaction between the existing consumer protection, judicial and regulatory frameworks may have created a situation whereby rights granted under EU law exist in theory but are frequently inaccessible in practice for ordinary citizens.

We therefore wish to bring to the attention of the European Commission a number of systemic concerns regarding the operation of consumer protection mechanisms in Ireland, particularly as they affect mortgage holders whose loans have been sold to non-bank entities and debt servicers.

These concerns raise questions regarding Ireland’s practical implementation of:

  • Council Directive 93/13/EEC on Unfair Terms in Consumer Contracts;
  • Directive 2013/11/EU on Alternative Dispute Resolution for Consumer Disputes;
  • Article 47 of the Charter of Fundamental Rights of the European Union;
  • The principles of effectiveness and equivalence established in the jurisprudence of the Court of Justice of the European Union.

1. Practical Difficulties Regarding Timely Access to Alternative Dispute Resolution

The Financial Services and Pensions Ombudsman (FSPO) is Ireland’s designated Alternative Dispute Resolution body for financial services disputes.

Article 8 of Directive 2013/11/EU provides that ADR procedures should generally be concluded within 90 calendar days from receipt of the complete complaint file.

In practice, many mortgage-related complaints remain unresolved for several years. We are aware of complaints lodged as far back as 2020 that remain unadjudicated.

Such delays undermine the objectives of the ADR Directive, deprive consumers of timely remedies and render the ADR process ineffective in circumstances where consumers face ongoing enforcement action, repossession proceedings or financial hardship.

The practical consequence is that consumers may lose their homes before the designated ADR body has investigated the underlying complaint.

2. Procedural Requirements Potentially Restricting Access to ADR Mechanisms

The FSPO has recently required two physical signatures on complaints relating to jointly held mortgage accounts.

Many distressed borrowers are separated, estranged, subject to domestic difficulties or otherwise unable to obtain the cooperation of the second borrower.

The practical effect of this requirement is that otherwise valid complaints are delayed, rejected or prevented from proceeding.

This procedural requirement appears incompatible with the EU principle of effectiveness, which prohibits Member States from imposing procedural requirements that make the exercise of rights conferred by EU law excessively difficult or impossible in practice.

Consumers should not be deprived of access to an ADR mechanism merely because a second borrower is unavailable, unwilling or incapable of providing a signature.

3. The Interaction Between National Limitation Periods and Ongoing Unfair Contract Term Protections

The FSPO frequently relies upon domestic limitation periods to decline to investigate complaints involving alleged unfair terms within mortgage contracts.

However, the Court of Justice has consistently held that consumer protection under Directive 93/13/EEC is a matter of public policy and that national procedural rules must not undermine the effectiveness of the protections afforded by EU law.

Where unfair terms continue to produce legal effects, or where consumers were not adequately informed of the nature and consequences of contractual clauses, the application of limitation periods may prevent effective enforcement of rights guaranteed under EU law.

We are concerned that excessive reliance upon domestic procedural rules may not sufficiently reflect the requirements arising from EU consumer protection jurisprudence.

4. Practical Barriers to Judicial Review and Effective Remedies

Consumers who seek to challenge decisions of the FSPO through Judicial Review proceedings face the prospect of significant adverse costs orders.

The disparity in resources between individual consumers and State-funded bodies may operate as a substantial deterrent against judicial scrutiny.

In practical terms, many consumers may be denied an effective opportunity to challenge decisions affecting rights derived from EU law.

This raises concerns under Article 47 of the Charter of Fundamental Rights, which guarantees the right to an effective remedy and access to an independent tribunal.

5. Practical Difficulties in the Application of the Ex Officio Duty to Examine Unfair Terms

The Court of Justice has repeatedly held that national courts must examine potentially unfair contractual terms of their own motion whenever they possess the necessary legal and factual material.

Despite this well-established obligation, Irish mortgage possession proceedings frequently proceed without any substantive examination of alleged unfair terms.

Consumers regularly raise issues concerning:

  • Variable interest rate clauses;
  • Interest-only arrangements;
  • Transparency of contractual terms;
  • Affordability assessments;
  • Acceleration clauses;
  • The transfer of loans to non-bank entities.

Nevertheless, such matters are often treated as peripheral to possession proceedings.

This creates a situation where possession orders may be obtained without any effective examination of rights guaranteed by Directive 93/13/EEC.

6. Structural Barriers to Accessing Effective Remedies

A particularly serious concern arises from the interaction between the Irish court system and the consumer protection framework.

Debt servicers and mortgage holders may obtain possession orders in the Circuit Court, a relatively accessible forum.

However, consumers seeking affirmative relief in relation to unfair terms generally must pursue proceedings in the High Court due to jurisdictional and valuation constraints.

At the same time:

  • Civil legal aid is generally unavailable for mortgage and property disputes;
  • High Court litigation is prohibitively expensive;
  • ADR complaints may take many years to resolve;
  • Judicial Review proceedings carry significant costs risks.

The result is a structural imbalance whereby financial institutions and debt servicers possess practical access to enforcement mechanisms, while consumers lack realistic access to remedies intended to protect rights granted by EU law.

This creates a situation in which rights theoretically available under Directive 93/13/EEC are frequently inaccessible in practice.

Request to the European Commission

We respectfully request that the European Commission examine whether the cumulative effect of the matters outlined above is compatible with Ireland’s obligations under:

  • Directive 93/13/EEC;
  • Directive 2013/11/EU;
  • Article 47 of the Charter of Fundamental Rights of the European Union;
  • The principles of effectiveness and equivalence established by the Court of Justice of the European Union.

In particular, we ask the Commission to consider whether Irish consumers facing home repossession are currently afforded a practical, accessible and effective means of enforcing rights derived from EU consumer protection law before losing their homes.

The central concern raised by this Open Letter is straightforward.

Debt servicers may obtain possession orders through relatively accessible national procedures, while ordinary consumers often encounter significant practical, financial and procedural obstacles when attempting to enforce rights granted to them under European Union law.

We are concerned that the cumulative effect of these obstacles creates a substantial risk that EU consumer rights exist in theory but cannot be exercised effectively in practice.

We respectfully request that the European Commission investigate these matters and engage with the Irish State where appropriate to ensure the effective and practical enforcement of rights already conferred upon consumers under European Union law.

Yours faithfully,

Ben Hoey FCCA, AMCT

Founder, Misselling.ie

Chartered Accountant and Consumer Banking Expert