asked the Minister for Industry, Trade, Commerce and Tourism (a) when he intends to implement a promise made by his Minister of State to the Consumers' Association of Ireland in 1984 to bring in new consumer credit regulations by January 1985; (b) if he will confirm that indeed these regulations may be implemented under a section of the Consumer Information Act; and (c) if he appreciates the urgency involved now due to recent well-publicised cases of people failing to make repayments and the consequences involved for them.
Written Answers. - Consumers Association of Ireland
21.
An order has been drafted under the Consumer Information Act, 1978, which will require any advertisements or notices that make reference to the cost of credit to show the true cost of that credit by means of an annual percentage rate of charge (APR). The APR is the total cost of the credit expressed as an annual percentage of the amount of the credit granted. It standardises the method of calculating the cost, frequency of payments made, plus the interest and other charges payable.
It was not possible to complete the work involved in making the order by January 1985 as had been envisaged in 1984. A draft directive on consumer credit, including provisions on the annual percentage rate of charge, has been under discussion in Brussels for a number of years. We had hoped for earlier adoption of this directive which would have cleared the way for the introduction of wide-ranging legislation on consumer credit. Because of this continuing delay we decided to go ahead with the making of our own order on the annual percentage rate of charge so that the consumer will be better informed of the true cost of credit. It was necessary in drafting the order to take account of the discussions at EC level.
The order is intended to do three things:
(i)It will require any advertisements that make reference to the cost of credit to show the true cost of that credit by means of an annual percentage rate of charge (APR),
(ii)any notices/leaflets relating to loans or credit sales which are displayed at a place where a cash loan can be obtained or a credit purchase made will have to show the true cost of credit using an APR,
(iii) it will set out legally binding definitions relating, in the main, to consumer credit.
Consultation of interested parties, which is obligatory under the Consumer Information Act, has taken place and a notice of intention to make the order was published, as required by the Act, in the press on 30 January. The draft order is now being finalised for presentation to both Houses of the Oireachtas. It is expected that the order will be laid before both Houses for positive approval before the end of the present session.
I can confirm that the order can be made under the Consumer Information Act, 1978; sections 11 and 12 of that Act enable me to do this. While licensed banks are at present excluded from the provisions of the Consumer Information Act I am satisfied that they will offer the same information to the consumer as will be required of other institutions. I fully appreciate the urgency and the importance of providing consumers with information on the true cost of credit which will enable them to make an informed choice between the various credit offers.