Vol. 523 No. 4
54 Mr. Ring asked the Tánaiste and Minister for Enterprise, Trade and Employment if legislation will be introduced to highlight consumer rights regarding balloon payments in the purchase of vehicles (details supplied). [21458/00]
Statutory protection for consumers in relation to credit agreements is provided for under the Consumer Credit Act, 1995, which is enforced by the Director of Consumer Affairs. The provisions essentially cover requirements relating to the form and content of credit agreements, matters arising during the currency of the agreements and matters arising on termination of agreements or on default. These provisions apply in general to all credit agreements, including agreements between a creditor and a borrower which may involve a "balloon" payment.
In addition, the 1995 Act lays down specific provisions in relation to consumer hire and hire purchase agreements. Traditionally these have been the two main types of agreement under which consumers acquire cars in Ireland. Garages acting as credit intermediaries on behalf of different financial institutions mainly sell these types of agreement. Under a hire purchase agreement, title to the goods will pass to the consumer once the terms of the agreement have been complied with. Under a consumer hire agreement, the consumer will never have title to the goods, since it is a pure lease agreement. I am given to understand that finance houses, in selling credit agreements of the type referred to by the Deputy, sometimes term them as consumer hire agreements and in other cases as hire purchase agreements. The Director for Consumer Affairs has advised me that this can cause confusion for consumers – or indeed for credit intermediaries who sell these financial products to consumers – as to the nature of the finance that is being arranged or offered.
The message to consumers is to urge them to be vigilant. If consumers are unsure about the category of legal relationship that might be created between them and the lenders in any particular instance, and its potential effect on their statutory rights, they should not hesitate to ask questions. Sources of advice for consumers in this regard include the Office of the Director of Consumer Affairs and the European Consumer Centre.
