I move: "That the Bill be now read a Second Time."
I wish to share time with Deputy Tom Sheahan.
Central Bank and Financial Services Authority of Ireland (Protection of Debtors) Bill 2009: Second Stage.
Is that agreed? Agreed.
I am pleased to introduce, on behalf of Fine Gael, the Central Bank and Financial Services Authority of Ireland (Protection of Debtors) Bill 2009 to the House today, which is designed to regulate debt collection businesses and imposes a burden on persons engaged in the collection of money and debt to register. By so registering, this will introduce a system of vetting by the Garda Síochána before such persons can operate as debt collectors to ensure the business of collecting money is regulated in an acceptable way in a democratic country. It is an important and necessary piece of legislation and a Bill which places the protection of the citizen on a priority footing.
For some time I have endeavoured to convince the Government, the Minister for Finance, Deputy Brian Lenihan, Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern and the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, that it was necessary to take appropriate action to regulate debt collection in order to protect vulnerable debtors. People have visited my clinic, having been threatened by known criminals engaged in the debt collection business. People have described how their property has been vandalised and they have been assaulted. People are afraid and vulnerable. They are fearful to make a complaint to the Gardaí Síochána. They have been let down by the Government which has turned a blind eye to their plight.
We have no system of regulation of debt collectors. A comparative analysis with our UK counterparts shows we are somewhat alone in this regard. In the UK debt collectors are licensed by the director general of fair trading under the Consumer Credit Act 1974. In the US debt collection agencies are regulated by state and federal government, and the latter is catered for in the Fair Debt Collection Practices Act. The absence of any regulation in this State means anyone can set up a debt collection agency and there are no rules as to how these people can operate. Debts can also be sold, sometimes without the creditor's knowledge. With more people owing more money, thanks to the economic collapse which has been presided over by the Government, debt collection will become a more profitable business for some. We are seeing that in anecdotal evidence on a weekly basis.
I do not have a problem with saying individuals and citizens should honour their debt obligations; of course they should. However, debtors, citizens and members of the public should be protected by law from debt collection methods that overstep the bounds of acceptable pressure and duress, which is what we are currently seeing. A reasonable person might expect a Government to do everything it should to make it difficult for criminals to go about their business, while at the same time doing all in its power to protect and uphold the common good.
This Government seems to take the opposite approach. It is as if its core constituency, whose rights it seeks to vindicate, are the minority criminal fraternity, rather than the law-abiding majority of the citizenry. We have a situation where almost 90% of gangland gun murderers remain at large and where a handful of gangland criminals in prisons continue to run their empires from behind bars with an assortment of mobile phones and other advanced technological devices at their disposal.
We have a situation where paramilitary criminals in Portlaoise dine on the finest of food while unemployed professionals queue for care packages on Church Street, not 200 m from the prison. We have a situation where known drug dealers escape prosecution and have little trouble getting passports and haulage licenses, while legitimate entrepreneurs are choked by regulation and red tape. We have a situation where criminal debt collectors are neither vetted nor monitored, but can set up a business with ease and threaten, intimidate, vandalise and assault debtors to extract money from them.
We would like to see a rebalancing of the justice system in favour of the law-abiding citizen. It is essential that there be a programme of vetting for those engaged in the debt collection business. Debt collectors have a most responsible role. They come to people who are at a low ebb and are very vulnerable. Debtors are often easy to intimidate and exploit as they are under a lot of stress, not only themselves but their families. I know this. I have had these people come to my clinics and tell me first-hand about the terror they endured at the hands of criminal debt collectors and how they were afraid to go to report the matter to the authorities.
This problem has worsened significantly since the economic downturn. Well known builders have been assaulted. There were 276 people jailed last year for failing to repay loans to banks and other financial institutions, comprising 256 men and 20 women. The average sentence was 27 days, but one person was forced to spend 90 days inside our prisons. In comparison, 194 were jailed for failing to repay debts in 2006. We can see a graph quite plainly, it is rising and very little is being done about it. It is estimated loan defaulters account for 3% of all offenders imprisoned each year.
In recent months, the debt collection sector has grown, with eastern European mafia getting involved in what is now considered a lucrative field for criminals, where felons and shadowy characters are able to take up to 25% of the money they squeeze out of people, which is known as commission.
One particularly well known criminal drug trafficker — I am reluctant to name names when people are not here, but I refer to Martin Foley — glories in his criminal connections. He has used his criminal moniker as part of his debt collection company's title. He has his white van and travels up to people's doors, sometimes at night. He parks the van in such a way that people see the livery on the side of the van, which reads Viper Debt Recovery and Repossession Service Limited, and in case anybody might not recognise him or know who he is, he asks, "Do you not know who I am? There is my van. Look at my name. Now do you know who I am?"
There have been widespread reports about the "Viper's" debt collection activities in the midlands and south east, yet the authorities are doing little to relieve the burden and stress on the individuals who have had occasion to meet this man in recent times. I have drafted a Bill which is aimed at protecting debtors from people like the "Viper". Before elaborating on the contents of that Bill, I ask that the Minister for Justice, Equality and Law give his views on reports that one in three bouncers and private security personnel, all of whom are supposed to be vetted, have slipped under the radar. That amounts to approximately 7,500 people licensed to work in these jobs who have not been vetted by the Garda in spite of legislation passed in this House in recent years. In the case of foreign security checks being produced, what action is being taken to verify their authenticity? There is little point in having a vetting procedure in place and then allowing it to become dysfunctional or not used. Constant monitoring of the service is required to ensure it does what it was designed to do and to ensure that criminals are not working in the security industry in the State.
As has occurred in the area of private security companies, regulation of the debt collection industry will reconcile any ambiguities within this developing industry and will ensure the transparent, fair and efficient operation of debt collection agencies. The Private Security Authority has sought to licence an estimated 20,000 individuals from a previously unregulated environment and in so doing also requires that individuals undergo training and must submit their details for criminal record checking. In 2007, it revoked four licences and suspended two persons. It made 11 prosecutions against unlicensed contractors and in one case a company was fined €25,000. Notwithstanding the loophole that has emerged in respect of foreign police vetting certificates, the PSA's work has been very important and should be built upon. At the same time it should be reviewed given the type of loophole that is beginning to emerge where persons are working in the industry without being vetted. There is a difficulty in regard to vetting that needs to be examined with a view to improving matters.
Recently, a constituent sought a vetting clearance to apply for a job in the security industry in the United Kingdom. He was required under law to produce an appropriate vetting certificate but he could not get one. He had to proceed by way of affidavit that he had never been involved in any criminal activity, which is a form of self-regulation that has its problems and should not be encouraged. In this case the individual had no choice but to produce an affidavit or he would not have even got an interview. That issue needs to be dealt with.
The allocation to the PSA from the justice Vote in 2007 was €2.7 million. The PSA generated €2.3 million in licence fees, and the amount was credited as appropriations-in-aid to the justice Vote. That is a system that is clearly capable of paying for itself, which is another incentive to broaden the remit of the PSA to ensure we do not have the type of loopholes that are emerging.
I wish to outline the provisions of this Bill. The purpose of the Bill is to regulate debt collectors so they must register with the Financial Regulator and be vetted by the Garda Síochána before they can operate in Ireland as a licensee retrieving both consumer and commercial debt. Ireland has no system of regulation for debt collectors, unlike many European Union countries. As a result, anyone can set up a debt collection agency and there are no rules as to how they should operate. Debts can be sold on without a creditor's knowledge. With more people owing money, debt collection will become a more profitable business. Members of the public should be protected by law from debt collection methods that overstep the bounds of acceptable pressure.
The Bill will establish a regulatory framework in which a debt collection regulator under the remit of the Financial Regulator will reconcile any ambiguities within this developing industry and will ensure the transparent and efficient operation of debt collection agencies. The main function of the debt collection regulator is to issue licences to suitable applicants once they have supplied all relevant documentation, including a certificate of clearance from the Garda Síochána and a tax clearance certificate from the Revenue Commissioners. A licence will issue on a two yearly basis. It is the right of the regulator to refuse, revoke or suspend a licence at any time if deemed fit and for good reason.
The Bill also obliges licensees by law to notify a debtor and the regulator in writing if a debt is to be sold, transferred or assigned for value. Debt collection can, unfortunately, involve the exertion of pressure on the debtor. There have been media reports on collection tactics employed by some debt collectors to retrieve funds due and owing. There is also evidence that persons with criminal backgrounds are operating in this industry. Debtors feel intimidated, harassed and threatened. The Bill provides for complaints by debtors, made in good faith, to be investigated by the regulator against a licensee. If the complaint is upheld the licensee may have his or her licence suspended or revoked. A licensee must notify the regulator if he or she is convicted of an offence or if there are proceedings for an offence pending if charges have been brought.
Only persons of good and sound character and repute may engage in the debt collection business. I have met persons in the industry who have been engaged in this work for many years. They have nothing to fear. They are supportive of the legislation because they feel the type of regulation envisaged is in line with best international practice. They feel the business in which they have been engaged for many years has become sullied and tarnished by the activities of a few in recent times.
Section 1 provides that the Act shall be known as the Central Bank and Financial Services Authority of Ireland (Protection of Debtors) Act 2009. Section 2 is the interpretation section. Section 3 provides for the approval of the Houses of the Oireachtas for any regulations made by the Minister under the Bill. Section 4 is a technical amendment which provides that the Irish Financial Services Regulatory Authority — now the Financial Regulator — shall encompass the office created by the Bill.
Section 5 amends the Central Bank Act to provide for the establishment of the regulator of debt collectors under the auspices of the Financial Regulator. This section employs a similar structure to the Registrar of Credit Unions under the same office and provides that the regulator has the power to issue licences to persons, partnerships or companies that are planning to operate as debt collectors.
Section 6 provides for the system of application to the regulator for a licence to operate as a debt collector. This section provides that the regulator may request certain background information, including Garda Síochána vetting, to establish that the applicant is a fit and proper person to operate as a debt collector. If the person is not deemed fit a licence will not be granted.
Section 7 provides for the grant, refusal or revocation of a licence to an applicant by the regulator. A licence shall remain in force for a period of two years before it needs to be renewed. The regulator may refuse to grant a licence in circumstances where he or she believes that to grant the licence, or allow an existing licence to continue to be in force, would be contrary to the safety and welfare of a person. Section 8 provides for the renewal of licences.
Section 9 provides that an applicant for a licence under this Bill must produce a current tax clearance certificate before a licence can be issued and the tax clearance certificate must remain valid, or be replaced by a new certificate, for the term of the licence. Section 10 provides that certain documents must accompany the application for a licence. Section 11 provides that an applicant for a licence, or a holder of a licence, must notify the regulator of any prior conviction or any conviction they accrue while in possession of the licence.
Section 12 provides that the regulator may seek information from the Garda Síochána in respect of any applicant or holder of a licence. Section 13 provides for the revocation or temporary suspension of a licence in circumstances where the licensee is found to have supplied misleading information to the regulator or is, in the opinion of the regulator, no longer a fit person to hold a licence. Section 14 provides that the regulator must notify the applicant or holder of a licence of any refusal, suspension or revocation of a licence and prescribes the form for such notification. Section 15 provides for appeals of a decision of the Regulator.
Section 16 prohibits the sale, transfer or assignment of a debt without the prior written consent of the debtor. This is designed to enhance transparency and to ensure debtors have full knowledge of who owns their debt, and to whom they are ultimately indebted. A debtor may not unreasonably withhold his or her consent. This is very important in the context of the "Viper" Foley and his cohorts, and of people who can buy debt in pubs for a slice of the debt that is ultimately collected. People can have no idea of the person or group with whom they are engaged in the transaction, and privity of contract appears to have no place in such an arrangement.
Section 17 provides that the regulator must be notified where a debt is sold, transferred or assigned. Failure to do so is an offence under section 19. Section 18 provides that a person may make a complaint to the regulator about the conduct of a debt collector. This provides an additional layer of protection for a debtor who may not wish to go to the Garda Síochána or who feels otherwise intimidated. The regulator can then conduct an investigation into the complaint, including power of entry and inspection of the debt collector's premises, and can impose certain sanctions on the debt collector.
Section 19 deals with offences committed under the Act. There is a scale with three levels of offences that can be committed under the Bill. The first level is administrative offences, and the Bill makes it an offence to operate as a debt collector without a licence, or to fail to provide the regulator with the requisite documents or notifications under the Act. The second level of offences deals with misrepresentations made by a debt collector to a debtor. This is very important because many debtors may have limited information about court processes and legal systems and this should not be exploited by debt collectors. As such, it is an offence to suggest that a document is a legal document or has some official capacity which it does not have, in order to coerce the debtor to discharge the debt more quickly. I have recently seen some good impressions of documents purporting to be from the court, some of which even bear a harp and the stamp of the High Court, but which are issued from premises that have absolutely no relationship with the courts or any agency of the State.
I ask the Minister of State to allow the Bill proceed to Committee Stage. I am not holding my breath, because the record of the Government is not very good in this respect, but if the Government feels there are defects that might be important or there are improvements that can be made, we can thrash them out on Committee Stage.
The absence of a vetting system for debt collectors is a weakness in our justice system. It is a gap that is overlooked by the Government, and turning a blind eye plays straight into the hands of those shady debt collectors who are criminals. Inaction on this lets down the people that the Government should be anxious to help, such as the vulnerable who have fallen into debt through the collapse of their businesses or unemployment and who are being buffeted violently by the stormy winds of the recession. The Bill is straightforward and proposes a system that would fit in easily to existing mechanisms and is likely to generate enough income to be self-financing. Most importantly, our proposed vetting system will help keep communities safer. I hope all parties in this House, particularly the Government parties, will see the merit of these proposals. I commend the Bill to the House.
I ask the Minister of State to support this Bill and let it go forward, because if the Government does not do so, it would equate to the recent scenario where a drug trafficker was awarded a haulage licence. Some of the people who have got involved in debt collection have awarded themselves fancy names, such as "debt collection services". The idea that they consider themselves service providers is quite scary. Some businesses are using this to get back the money they are owed. This creates a full circle of pressure, whereby the businessman owed the money is under pressure and feels he must exert pressure above and beyond what is needed. This is why he might use people like the "Viper". There are many other individuals who may not be as forward as the "Viper", but who might still use tougher measures.
These debt collectors are taking anything between 15% and 20%. I have had people in my constituency office owing relatively small sums of maybe €1,000 or €2,000, yet the pressure put on them affects their entire family. They are just not in a position to pay. They would do so if they could enter negotiations and pay the debt over an agreed length of time, but things seem to be getting more underhand and more violent. I had a lady in my office recently who borrowed €1,000 for a first holy communion celebration. After a few weeks, a total of €1,500 was due and the debt collectors were calling to her house. First, they kicked in the door and left. They came back a week later, following a few threatening phone calls, and they broke the windows in the house. This woman is a lone parent and she is in a frantic state. She is afraid in her own home. That criminals are describing themselves as "service providers" in order to collect debt is what kills me.
The chairman of the Irish Human Rights Commission, Mr. Maurice Manning, recently warned that imprisonment over debt is likely to increase. We all understand and accept that, because people are under financial pressure and money is owed. The UN called on the Government last year to ensure its laws are not used to imprison a person for the inability to fulfil a contractual obligation. That is quite ironic, because no member of the Cabinet is currently fulfilling his or her contractual obligations, as the Government has cut back 17% on some agricultural schemes and 8% on other schemes. I am sure the Government will ensure the law is not used to imprison people owing to their inability to fulfil a contractual obligation.
Debt collection is a seedy business. I support what my colleague, Deputy Charles Flanagan, is trying to do. Such businesses should come under the auspices of the Financial Regulator and, more important, should be regulated by the Garda Síochána. That is a must and I ask the Minister of State to consider that proposal.
The Bill also deals with the issue of complaints made in good faith. I referred earlier to the woman who visited my constituency office this week and who told me her door had been kicked in and that, following several threatening telephone calls, her windows had been broken. Debt is a serious issue for many people in Ireland. While I am not aware of the up-to-date figure, the Central Bank in 2007 noted that of all countries in the euro region Ireland had the second largest ratio of personal sector debt to gross domestic product and the largest ratio of personal sector credit to gross national product, which is shocking. The biggest issue facing the State and the people of this country during this time of recession is personal debt. It is not necessary for me to speak of the situation in which young couples with mortgages of €300,000 find themselves as that is evident to everyone. That percentage of personal debt is causing great hurt. People are finding it difficult to deal with their debt. The repercussions of the level of debt held by families and households will result in social, personal and health problems in the future.
I believe everyone should honour their debts. In 2008, 276 people were imprisoned for failure to repay debt. On average, they received sentences of 27 days of which they served an average of 20 days. Also, on release from prison, the debt remained to be paid. Imprisonment does not make economic sense. Not alone does the debt remain to be paid when the debtor is released from prison but the cost to the State far outweighs the benefits that result. At a cost of almost €2,000 a week, it is more expensive to imprison a person than to put him or her up in a swanky hotel in Dublin for a week. What benefit is this to our already struggling Exchequer?
There is chronic overcrowding in many of our prisons. In April 2009, just short of 4,000 prisoners were in custody. The bed capacity of our prisons is 3,600. This represents an occupancy level of 106%. Overcrowding in prisons creates tension and makes prisoner violence more likely. Also, it severely hinders the capacity of the prison system to rehabilitate serious offenders. Some 12 of our 15 State prisons are packed beyond capacity. This is not, as some might believe, a matter of prisoner comfort levels but of ensuring we have safe and functioning prisons. The role of prison is partly to rehabilitate inmates. Currently, this is not happening as almost half the number of offenders are returned to prison within four years of release. Is prison, at a cost to the Exchequer of €2,000 per prisoner per week, the correct place to send people who owe money bearing in mind the debt remains to be paid by the offender on release from prison? This does not lie well me.
Often, there are threats of physical violence and damage to personal property. I am aware of a couple of incidents which were reported to me in my constituency office. This type of activity is happening not alone in Dublin or in the cities, it is happening in my constituency. "Enforcers", which is what I would call these debt collectors, are being sent to houses to extract money owed. As the economy worsens and businesses encounter financial difficulties, there are disturbing reports of threats, intimidation, destruction of property and physical assaults not alone on people owing substantial debts but on people who owe as little as €1,000 or €2,000.
Late last year, shots were fired over the house of a developer in County Offaly who owed money to a business associate. Also, a Galway builder had a brick put through the windscreen of his car when he refused to co-operate with a debt collector. Many of these debts relate to the construction industry and to young people with mortgages of up to €300,000 who are unable to pay any of their other bills. I ask the Minister of State to take on board what is happening, not alone in our cities and urban areas but in areas like mine.
I will outline to the House another sad incident reported to me in my constituency office. A person in business for more than 30 years and who has an excellent track record recently fell on tough times. As turnover and cash flow were causing him major problems, he was finding it difficult to pay his suppliers. His primary concern was to pay his staff — the number of which had been greatly reduced — on Fridays and to then give a portion of the profits, of what continues to be a profitable business, to his creditors. While he was having difficulty trying to carve up his reducing profits, he was keeping his debts at bay and the business remained profitable. Eventually, one of his suppliers became heavy handed. Not alone did the supplier send people to his home after several threatening telephone calls but — I could hardly believe this — when his wife was in town with their children the debt collectors approached her and took from her what money she had in her purse under the guise of debt collection services. For these people to say they are providing a service strikes a chord with me.
I applaud Deputy Flanagan for bringing forth this Bill. I have outlined for the Minister of State some of the stories told to me in my constituency office not from people who owe hundreds of thousands or millions of euro but from people who owe as little as €1,000 or €2,000. I hope the Minister of State will support this Bill and let it go forward. It is needed to protect people who, through no fault of their own, find themselves with cash flow problems. Many of these people believe these heavy handed criminals and debt collectors are on par with our banks.
I wish to share my time with the Minister of State, Deputy Mansergh.
Is that agreed? Agreed.
I would like to respond on behalf of the Government to Deputy Charles Flanagan's proposed Private Members' Bill. I commend the Deputy on the efforts involved in bringing forward this proposal. The motivation behind the Deputy's proposal is understandable.
Many people have been significantly affected by the difficult economic situation this country is now experiencing. This has manifested itself in difficulties in making repayments for goods and services, for mortgages or in fulfilling contractual obligations. This adverse situation has, for many, occurred very quickly. It could not have been reasonably anticipated when people undertook financial commitments. Clearly, I would join colleagues on both sides of the House in expressing our concern for persons who now find they are experiencing debt-related issues.
We are all very aware of the pressures of modern society and of the fallout from the difficult economic circumstances in which many people now find themselves. This has been exacerbated by what was, by reference to Irish historical circumstances, an extraordinary availability of consumer credit in recent years. Unfortunately, many are now experiencing the down side of over-extending their borrowing arrangements or there has been a change in personal circumstances, such as loss of employment.
The proposal put forward this evening by Deputy Flanagan is an interesting one and is a topic worthy of debate. He has proposed a Central Bank and Financial Services Authority of Ireland (Protection of Debtors) Bill 2009. The stated purpose of the Bill is to provide for the issuing of licenses to conduct debt collection activities. Such persons, companies or organisations seeking to recover a civil or commercial debt would be required to register with the Financial Regulator and be vetted by the Garda Síochána before they can operate in Ireland as a licensee retrieving debt.
The Bill proposes that the Irish Financial Services Regulatory Authority, which is a constituent part of the Central Bank, would regulate debt collection as a financial service. It would establish a regulatory framework in which a debt collection regulator, under the remit of the Financial Regulator, would deal with this service and seek to ensure the transparent and efficient operation of debt collection agencies. It is proposed that a debt collection regulator would issue licences to suitable applicants once they have supplied all the relevant documents including certificate of clearance from the Garda Síochána and a tax clearance certificate from the Revenue Commissioners. A licence would issue on a two-yearly basis. The Bill provides that the regulator may refuse, revoke or suspend a licence at any time. The regulator would be obliged to investigate complaints made by a debtor against a licensee.
However, interestingly, among the criteria for the award of a licence, there is no specific mention of previous convictions of the applicant. The Bill includes a section on offences, some of them regulatory type offences, but would also provide for false representation and harassment. Unfortunately, the Bill as drafted would do little to address the issue it claims it would address.
All functions relating to consumer credit have been the responsibility of the Financial Regulator since 2003. There are two minor exceptions to this, pawnbrokers and credit intermediaries which are the responsibility of the National Consumer Agency. Consumer credit covers the content of consumer credit contracts, the calculation of the APR and information and advertising in connection with consumer credit. The main primary legislation on this matter is the Consumer Credit Act 1995, as amended. In the first instance, my colleague, the Minister for Finance is opposed to providing for a statutory regulator of debt collectors, either on a stand-alone basis or within the Financial Regulator structure. He is of the view that the collection of debts as an activity is not necessarily comprehended in respect of the provision of financial services.
The role of the Financial Regulator is confined to financial services. The functions of the regulator are to help consumers make informed and responsible decisions on their financial affairs in a safe and fair market and to foster sound and solvent financial institutions which give depositors and other consumers of financial products confidence that their deposits and investments are safe. Accordingly, it is not the role of the regulator to regulate the collection of debts arising from commercial or other activities. Assigning a debt regulation function to the Financial Regulator would dilute the core function of the regulator and would have an impact on its resources and expertise. Debt collection is an activity which takes place throughout the country and the enforcement of licensing requirements would need to be carried out at a local level and would result in the regulator having to take on an enhanced role throughout the country and require it to obtain additional expertise in enforcement methods. Deputy Flanagan's proposal would thus require very significant financial and staffing resources for the Financial Regulator and for the Garda Síochána in terms of potential vetting of applicants. In the context of scarce resources available to the Government at this time, this would not represent the best use of such resources.
There is a particularly serious flaw in the approach set out in Deputy Flanagan's proposal. Critically, I can find nowhere in his text an explicit provision that a person or company operating on their own account to collect debts owing to them would be exempt from his proposal. If the Bill were to be enacted, as it is currently drafted, it would require every person and company engaged in a business activity, be it the sale of goods or services, to have to seek licensing as a debt collector, before they could seek to recover moneys owing to them in the normal course of business. This would apply, for example, to the ESB, the local corner shop, the plumber, etc. Is this seriously what the Deputy has in mind, because that would appear to be the main consequence of his proposal? If so, it would appear to be a somewhat bizarre, cumbersome and very bureaucratic approach.
Related to my previous point, the Deputy does not define a "debt collector" in his Bill. This is a serious deficiency because we cannot be sure of the scope that is intended.
Much of the public concern with respect to the operation of debt collectors relates to mortgage debt. There are arrangements in place to deal with this issue. For example, the recapitalisation programme announced in February 2009 includes a new code of conduct for mortgage arrears, which has been issued by the Financial Regulator and came into force on the 27 February 2009. The new code applies to the recovery of debt with respect to the mortgage lending activities to consumers in respect of their principal private residence in the State. It is mandatory for all mortgage lenders registered with the Financial Regulator including so-called "sub-prime lenders". Under the code, where a borrower is in difficulty the lender shall make every reasonable effort to agree an alternative repayment schedule; consideration should be given on a case-by-case basis to alternatives such as deferral of payments, extending the term of the mortgage, changing type of mortgage, or capitalising arrears and interest; and lenders will not commence legal action for repossession until after six months from the time arrears first arise. In addition, as part of their recapitalisation scheme, AIB and Bank of Ireland have agreed not commence court proceedings for repossession of a principal private residence until after 12 months of arrears appearing where the customer continues to co-operate.
It also might be appropriate here to say a few words about court proceedings in cases of mortgage arrears where orders for possession or sale of the mortgaged property are being sought by lending institutions. It has become apparent in recent times that some lending institutions are routinely applying in the High Court for repossession orders which could have been obtained in the Circuit Court. During Committee Stage discussions on the Land and Conveyancing Law Reform Bill 2006 recently, the Minister for Justice, Equality and Law Reform expressed concern that the additional costs and inconvenience of entering a defence in High Court proceedings may have the effect of discouraging borrowers who are in arrears with repayment from defending proceedings. Existing statutory provisions relating to court jurisdiction have been designed to encourage applicants for court orders to apply at the Circuit Court level where appropriate. This is reflected in section 17 of the Courts Act 1981 which provides for the awarding of Circuit Court costs in cases which could have been taken in that court but were taken instead, for whatever reason, in the High Court. From what I have already said, this would appear not to be a sufficient deterrent to commencing repossession proceedings in the High Court and I understand the Minister for Justice, Equality and Law Reform intends to deal with the matter.
Part 10 of the Land and Conveyancing Law Reform Bill 2006 updates the law relating to mortgages, including the obligations, powers and rights of lending institutions. The Minister for Justice, Equality and Law Reform intends to table a Report Stage amendment to that Bill which will, when enacted, require that all repossession or sale proceedings on housing loan mortgages be taken in the Circuit Court. His objective in bringing forward this change is to reduce the costs and inconvenience involved in making a court appearance and, thereby, encourage borrowers who are in arrears to enter a defence in such proceedings.
Section 16 of Deputy Flanagan's Bill refers to an assignment of a debt. A debt cannot be assigned without the prior written consent of the debtor, which consent cannot be unreasonably withheld. It is doubtful as to what real benefit this provides, as anyone receiving the debt would have to hold a licence under the earlier provisions of this Bill. Section 17 goes on to state that licensees must notify the sale, purchase or assignment of a debt to the regulator of debt collectors. Again, if all of the undertakings are licensed under the Bill and presumably conduct themselves with the same standard of behaviour, this provision would appear to be superfluous.
Debt collection and recovery services are a legitimate part of the normal activities of practically any business in dealing with its clients and customers. It is, of course, of particular relevance to the consumer credit industry. Many businesses use the services of debt collection agencies to collect money owed from a credit arrangement.
I am aware that Deputy Flanagan has previously expressed concerns that unscrupulous or criminal elements have or will become involved in debt collection activities. These concerns underline the very laudable intentions motivating the Deputy's proposal. We would all share those concerns. These concerns have been highlighted in recent media reports of alleged intimidation of persons owing money in various circumstances by "criminal" debt collectors. The reports claimed that people have been threatened, intimidated and physically assaulted and that property has been damaged by debt collectors. The name of one notorious person, with gangland connections, has been much mentioned. However, we should be careful about relying on what is to some degree anecdotal or hearsay evidence in this regard.
The alleged intimidation and threatening behaviour of debt collectors, or by any other person, appears to come within the scope of the provisions of the Non-Fatal Offences against the Person Act 1997. I am surprised that the Deputy seeks to create a new offence in section 19 of the Bill of harassment specifically in regard to debt collection because he will no doubt be aware that the 1997 Act already deals with assault, intimidation and demanding money with menaces. Section 11 of that Act provides that it is an offence to demand payment of debts with any criminal aspect, including intimidation or false statements. As the Bill before us makes no reference to this provision, it would create confusion between that criminal law provision and the proposal to regulate debt collection. I emphasise, as I am sure would the Minister for Justice, Equality and Law Reform, that any person who feels that he or she has been threatened or harassed in the context of the recovery of a debt allegedly owed to contact the Garda. It is not lawful for a creditor to seek to recover moneys owed in such a fashion. There are well defined procedures, both judicial and non-judicial, for the recovery of debt.
It might be fanciful to suggest, as Deputy Flanagan seems to do, that persons who employ threatening or abusive techniques or act in an illegal manner would seek to be licensed as debt collectors. I suspect those of a criminal inclination or background would conclude rationally that they would have little or no chance of being licensed. The intended targets of this proposal would thus likely escape its remit.
The Government is supportive of efforts to find alternative non-judicial approaches to the resolution of debt problems. Civil debt issues are based on individual circumstances and in most genuine cases would probably lend themselves to some form of mediation or conciliation process. The Government is supportive of alternative non-judicial approaches to the resolution of debt problems. We support and encourage the work of the money advice and budgeting service, MABS, of the Department of Social, Community and Family Affairs. That service's approach, which is based primarily on the willingness of the debtor to attempt to manage his or her situation, offers significant prospects of a successful resolution of the credit problem. The attitude of credit institutions and utility companies has been co-operative in working with MABS on behalf of its clients. MABS provides a crucial service for people who require help and advice in making their way out of serious debt. The Government continues to make significant financial resources available to the service. The approach it adopts offers a better way of achieving a result acceptable to both creditor and debtor.
I understand that District Court judges recognise the work of MABS and in some instances they recommend that people who are before the courts avail of it. However, it is often difficult to persuade persons in debt to engage in the process. Sadly, some people leave their debts until they reach the point, having been the subject of a court process, where imprisonment looms. The willingness of a debtor to manage his or her case is crucial and seeking expert advice is the best way of achieving a successful resolution to the problem of indebtedness. This voluntary approach is preferable to seeking to impose on the State the role of managing a debt collection and recovery process, especially one as cumbersome as that envisaged in the Fine Gael Private Members' Bill. Issues relating to debt come before the courts in many guises, for example, family law maintenance agreements, hire purchase agreements, creditor loans and failures to pay loan repayments to financial institutions, including credit unions. Generally, the courts take the view that where possible disputes are best resolved through mediation between the parties involved, avoiding court intervention unless absolutely necessary. However, we must recognise that circumstances arise, undesirable as they may be, where it is necessary for people to rely on the courts to enforce the terms of a contract. I do not concur with the view that we should legislate to make accessing these rights more difficult because Ireland would be put in a most unfavourable light internationally if our law prevented people from exercising their contractual rights. Deputies will agree these matters must be kept within the rule of law and as far away as possible from criminal elements.
Current legislation in regard to enforcement of court orders is long-standing and upholds contractual rights with specific safeguards. Despite what certain media and other commentators might claim, a person cannot be imprisoned merely on the grounds of inability to fulfil a contractual obligation. Committal orders are granted where a person fails to comply with a court order. The law provides that the judge shall only make a committal order where the debtor shows that the failure to pay was due to his or her wilful refusal or culpable neglect. This provision is intended to ensure that if a debtor is genuinely unable to meet the repayments under an instalment order, steps can be taken to ensure that he or she is not deprived of his or her liberty. Court instalment orders involve a statutory procedure to require the examination of a debtor's means by a court which will then consider fixing a periodic instalment to be paid to discharge the debt, taking into account the income and outgoings of the person concerned. If the person against whom the order is made fails to meet periodic payments, an application may be made for arrest and committal to prison, but this requires a further hearing by the judge under section 18 of the Enforcement of Court Orders Act 1926, as amended by section 6 of the Enforcement of Court Orders Act 1940.
The Law Reform Commission in its report on contempt in 1994 considered that the case for abolition of the sanction of imprisonment had not been established in regard to civil contempt. The commission felt that the powers of the court in this regard were coercive rather than punitive. It is an appropriate remedy only where the desired result cannot be achieved by other means and the defendant's active co-operation is a vital ingredient.
The relevant legislation on court enforcement procedures and personal bankruptcy will be kept under review, although there are no proposals in the current Government legislative programme. We are awaiting the publication by the Law Reform Commission later this year of a consultative report on debt enforcement and securing interests over personal property. This project will include an examination of alternatives to court based procedures to debt enforcement as well as existing court based arrangements, such as the instalment order procedure. It will also examine the attachment of security interests to personal property. As the commission will be consulting with interested parties, it would be unwise to act precipitously in regard to any legislative initiative in advance of the publication of the report.
Only 20% of debtors appear at court hearings. This is unfortunate because they lose a critical opportunity to take part in a significant process. I am not convinced by the argument that if the process in the courts is changed to an alternative form, 100% compliance will somehow ensue. Without the eventual prospect of a court sanction, debtors may believe it is easier to disengage with an alternative process than to comply. There is a responsibility on each person with debt issues to inform him or herself about the legal processes involved. The Courts Service website contains excellent material in this regard. I appreciate, however, that the procedures and documents involved can be legalistic and be difficult to understand.
At this time of pressure on all businesses, we need to be cautious in constructing a vast regulatory edifice which would not achieve its real target while increasing the cost of doing business for legitimate enterprises. This could have a knock-on detrimental effect on employment and business activity. I commend Deputy Flanagan on the humane considerations which underline his proposal. These considerations are shared by all Members of this House. However, the Government has a duty to ensure that legislative proposals are well founded and drafted. Unfortunately, the proposal from the Deputy does not fulfil those criteria.
Fine Gael's Private Members' Bill proposes that a debt collector regulator be appointed under the remit of the Financial Regulator. The various initiatives taken by the Government in respect of people who have fallen into arrears with their mortgage repayments are relevant to the discussion. The Government supports efforts to find alternative non-judicial approaches to the resolution of debt problems, in particular, the work of the money advice and budgeting service of the Department of Social, Community and Family Affairs. MABS's approach, which is based primarily on the willingness of a debtor to attempt to manage his or her situation, offers significant prospects for a successful resolution of the credit problem. The banks and their umbrella body, the IBF, are also aware of the problems relating to debt and have co-operated with various initiatives to cope with the unfortunate increases in debt problems in these difficult times.
As regards the proposal that a debt collector regulator be appointed under the remit of the Financial Regulator, even if it were decided that a formal regulator of debt collectors was to be set up, putting him or her in the Financial Regulator structure would not be the best option. The collection of debts involves more than collecting debts in respect of the provision of financial services, whereas the role of the Financial Regulator is confined to such services. The functions of the regulator include helping consumers to make informed and responsible decisions on their financial affairs in a safe and fair market and fostering sound and solvent financial institutions which give depositors and other consumers of financial products confidence that their deposits and investments are safe. It is not the role of the Financial Regulator to regulate the collection of debts arising from commercial or other activities.
Giving the debt regulation function to the Financial Regulator would dilute its core function and would have an impact on its resources and expertise. Debt collection is an activity that takes place throughout the country. The enforcement of licensing requirements would need to be carried out at a local level and this would also result in the Financial Regulator having to take on an enhanced role throughout the country. The financial services industry is rather more centralised than the debt collection process and it would be required to obtain additional expertise in enforcement methods. In addition, consideration would need to be given to the funding of a new debt collector regulator, as the Financial Regulator is funded by levies imposed on those whom it regulates and not by the Exchequer.
I respect the initiatives the Government has taken in respect of people who have fallen into arrears with their mortgage repayments. The House well understands this is a major area of indebtedness and I would like to outline the arrangements in place to deal with this issue. With regard of support for payment of mortgages, the mortgage interest supplement administered by the community welfare service of the Health Service Executive on behalf of the Department of Social and Family Affairs provides assistance where the mortgage relates to a person's sole place of residence. People in debt or in danger of falling into debt can also avail of the services of the Money Advice and Budgeting Service, MABS. This is a national, free, confidential and independent service.
The recapitalisation programme announced in February 2009 includes a new code of conduct for mortgage arrears, which was issued by the Financial Regulator and came into force on 27 February 2009. The new code applies to the recovery of debt in relation to mortgage lending activities to consumers, in respect of their principal private residence in the State. It is mandatory for all mortgage lenders registered with the Financial Regulator, including so-called sub-prime lenders. Under the code, where a borrower is in difficulty, the lender shall make every reasonable effort to agree an alternative repayment schedule; consideration should be given on a case-by-case basis to alternatives such as deferral of payments, extending the term of the mortgage, changing type of mortgage or capitalising arrears and interest; and lenders will not commence legal action for repossession until after six months from the time arrears first arise.
In addition, as part of their recapitalisation scheme, AIB and Bank of Ireland have agreed not to commence court proceedings for repossession of a principal private residence until after 12 months of arrears appearing, where the customer continues to co-operate. While the efforts of Fine Gael to address the problem are well intentioned and praiseworthy, the proposed Bill is not the best way forward.
I wish to share time with Deputy Morgan.
I never cease to be amazed by the breadth of knowledge of the Minister of State with responsibility for the Office of Public Works and by his involvement in such a wide area of subject matter in the House. The fact he has come racing in to underpin the code worked out with the banks by his colleague, the Minister of State, Deputy Barry Andrews, means there must be a great dearth of willingness on the Government benches to condemn Deputy Charles Flanagan's Bill. Having begun softly by sympathising with Deputy Flanagan highlighting the plight of vulnerable debtors who, in some cases, are being subjected to heavy handed pressure, harassment and even intimidation, the Minister of State, Deputy Barry Andrews, went on to deny the problem exists. He went further by saying that if the problem exists, the place to deal with it is not in the financial regulatory structure and concluded that it would not be a good idea to construct "a vast regulatory edifice". I did not hear anybody proposing to build such an edifice but I do not say I fail to appreciate the Government coming around to the recognition in its 12th and dying year that constructing vast edifices is not always necessarily a good thing but mar a deir an seanfhocal, "Is fearr déanach ná ró-dhéanach", and I welcome that latter day conversion.
Deputy Flanagan has raised a real issue. Sadly, this is a growth industry in the times in which we live. People find themselves indebted for whatever reason and, in some cases, they are extremely vulnerable, stressed and unable to discharge debts not because of recklessness on their part but because of the economic circumstances in which they find themselves. Only a small number of debtors plunge themselves knowingly and recklessly into these circumstances. In so far as recklessness is involved, it is not merely involved on the side of the consumer, it is frequently shared by the lender where moneys were recklessly lent in circumstances where questions might reasonably have been raised about ability to repay. Honest, decent, law abiding citizens find themselves in these circumstances and one has heard the case being made that they are being subjected to debt collection methods of which the House could not approve.
Is this jurisdiction out of step with similar and neighbouring jurisdictions within the European Union? Is debt collecting regulated in other countries? My understanding is it is in many countries yet no such regulation is in place here. Anybody, notwithstanding his or her track record, background or reputation, can set up a debt collection service in Ireland. I do not mean to say someone who found himself in difficulty with the law in relatively minor circumstances should forever be disbarred from this or any other type of work. I wish the Minister of State, Deputy Barry Andrews, had remained in the House to inform us where is his Spent Convictions Bill 2007. I would like this relatively minor Bill disposed of. I am puzzled, since we dealt with Second Stage many months ago, about why it cannot be progressed to Committee Stage but we have not reverted to it and we ought to.
It is an entirely different matter, however, for the House to hear allegations that somebody with a serious criminal record can engage in this business with impunity. Judging by his script, the attitude of the Minister for Justice, Equality and Law Reform seems to be either that the problem does not exist, that it would be wrong to handle it as the Fine Gael Bill suggests or that it would be too expensive to deal with it. He seems to be saying that it is a fact of life in the circumstances in which we are living and he is afraid that we must pass over it.
The Minister of State came into the House to corroborate the Minister's position and draws our attention again to the code worked out with the banks as a result of them getting €7 billion of taxpayers' money. The Bill's proponents may hold a different view but I do not think that the commercial banks or financial institutions are really at the heart of what is being aimed at here. I do not think mortgage institutions or the collection of mortgage debt is the type of thing that freelance collection agencies of dubious repute are concerned with. Generally speaking, a different route is taken by mortgage lenders. Most reputable mortgage lenders do not engage in heavy handed, oppressive or intimidating tactics in the way that other debts are being pursued.
The Minister of State says he agrees that the financial regulatory structure is not the place to include some kind of regulator of debt collection agencies. He says the purpose of the Financial Regulator is to foster sound and solvent financial institutions, which give depositors and other consumers of financial products confidence that their deposits and investments are safe. The Minister of State is right to say that was the intention, but that is not exactly the way it has worked out. Men of means, like the Minister of State with responsibility for the OPW, are very worried about their few bob in the banks, and certainly very worried about the conduct of the regulator in ensuring prudential supervision of the financial institutions. The aspiration was there and now he thinks it would be imposing on the Financial Regulator to repose this responsibility with him.
In so far as I can see, it is true that Deputy Charles Flanagan omitted to define debt collectors in the Bill and that would have to be put right, but it is a very minor matter. This Government seems to have made a habit of deploying all the resources available to it in order to pick holes in Private Members' Bills. Depending on how the wind is blowing later, however, they come in with the same legislation as if it was their own. The most recent example was the Criminal Justice (Surveillance) Bill dealing with covert surveillance. When the original Bill was published by the Labour Party there were extraordinary holes in it, according to the Government. According to the Minister, it would be in danger of alerting criminals to Garda investigative techniques. After a couple of terrible tragedies in Limerick, however, the Minister, Deputy Dermot Ahern, came around to the notion that it was his idea and he was in favour of it all along. It was then republished and rebranded. I suspect therefore that the issue raised by Deputy Flanagan about the necessity to regulate the debt collection agency system will come back to this House because we are heading into the kind of times where, unfortunately, resorting to debt collectors is likely to be more frequent.
Deputy Flanagan dealt with a small percentage of people who end up in prison for non-payment of debts or being unable to discharge fines. That is a real issue, especially on a night when the Minister announced that the Thornton Hall project is not proceeding because the preferred bidder has withdrawn or because negotiations with the preferred bidder have broken down. I do not know how many times in this House I have pursued with the Minister whether he was satisfied with the capacity of the preferred bidder to deliver the Thornton Hall project. The Minister got up on his high horse, as he frequently does, and piously lectured us about the outrageous imputation that he, above any Member of this House, would be seen even on the same side of the street as a developer. It is a very odd thing for him to say, given that he was the former Taoiseach's preferred emissary to London to find out anything he could about developers there, and a thing or two about developers in Dundalk as well, as Monarch Properties will tell one. However, the Minister thought it was a terrible imputation. I do not mind talking to developers at all. I do not see what the Minister thought was wrong with it, but clearly he did not satisfy himself about the capacity of this particular developer to deliver. After spending €41.5 million on farm land at an unsuitable location — that was purchased for approximately five times its value at the instruction of the former Minister, Michael McDowell and then Minister for Finance, Deputy Cowen — we have now been plunged into a situation where the project has collapsed. We need to address the issue of incarcerating people for non-violent crimes otherwise we will have a serious overcrowding problem in our prisons.
Deputy Flanagan has highlighted the necessity to regulate debt collectors and protect vulnerable people from their methods, which is a real issue. One must come from a very cosseted section of society to suggest what the Minister of State, Deputy Barry Andrews, did in his script. He said he wanted to emphasise clearly that any person who feels he or she has been threatened or harassed by anyone in the context of recovery of a debt allegedly owed by him or her, should contact the Garda. I represent a constituency where debt collection by moneylenders is a pretty regular feature of life every Saturday. To some extent, as a result of the Consumer Credit Act, which I introduced, we have regulated the sector so that moneylenders operating outside the law's remit are the exception nowadays. However, to tell people that they should advise the Garda in those circumstances misunderstands the facts of life in large tracts of urban Ireland, and I presume some tracts of rural Ireland. I can understand that out in Blackrock one may get a speedier response from les gendarmes than in certain other parts of the city. The Minister of State, Deputy Barry Andrews, may feel safe in his bed at night but unfortunately in large tracts of urban Ireland people do not feel so safe. They certainly do not feel that it is an escape from heavy-handed tactics by people seeking to recover debts to telephone the Garda and that everything will be all right.
This is a real issue. I do not see any need for an elaborate edifice. Reposing it in the consumer side of the financial regulatory structure seems to be as good a place as anywhere else but, quite frankly, I do not mind where it is so long as we do something to ensure the service is regulated.
I thank Deputy Rabbitte for permitting me to bring whatever reinforcement elements I still possess to his aid and I thank him and the Labour Party for sharing time with me. I recognise the depth and nature of the problems this Bill seeks to address and my party, like many others, is appalled by and opposed to the activities of debt collection agencies that bully and threaten businesses and their owners and, in many cases, families in debt and the heads of those impoverished households.
Like many other Deputies, I have read and watched recent news reports on the issue and I acknowledge the concern these reports create. It is also important to recognise that there is a pressing need to act on the problem of unregulated debt collection. However worthy the Bill presented is, its genesis and structure highlight and perpetuate the very flaws that the proposed legislation seeks to address, including the question of regulation generally.
In recent years, the Government and, to some extent, the larger Opposition parties have taken a Jekyll and Hyde approach to the question of regulation. Without much analysis or consideration, areas were deemed to have too much regulation and we, like many other States, mimicked the Thatcher mantra and deregulated our financial markets, the stock exchange and our banking sector. Not content with that, we opened up a second front of deregulation by selling off State-run enterprises and letting a self-regulating private sector provide vital goods and services.
In both cases, the Irish experience has been a massive failure. The lack of effective regulation and controls has given us the basket cases of Eircom and the entire Irish banking sector. A chief driver in this failure of deregulation was the creation of ineffective and toothless regulators. The best example of this was the twin roles played by the Central Bank and the Irish Financial Services Regulatory Authority in recent months. This was a Mr. Hyde angle.
In the past decade, we started a small industry of regulation creation, many of which were needed desperately but very few of which operated effectively or efficiently. The endemic failures of these supposed regulators are why we are where we are. Proposing a Bill that builds on failure does not make sense to me. However, what does make sense is to tackle the wider issue of financial regulation, an important pillar of which is controlling debt collection. Just as important and just as overlooked is the need to ban household moneylending altogether. We must begin again on the question of financial regulation in Ireland; it is an imperative.
Why do we not save the time we could spend on this Bill and immediately direct the Oireachtas Joint Committee on Finance and the Public Service to investigate international best practice and financial regulation? We could take a leaf from the book of one of the few positive consensus-driven exercises ever undertaken in this House, which was the DIRT inquiry. That was the first ignored warning bell that something was very rotten in our banking institutions. The work of the committee would be to find out what went wrong with financial regulation in Ireland and, perhaps more importantly, how to begin again with systems that work. It should be given powers of investigation similar to the DIRT inquiry with a time limit, perhaps to report by 1 September, with feasible options for future regulatory institutions and draft legislation proposed to a public sitting of both Houses of the Oireachtas not later than Tuesday, 8 September. We could implement the Bill alongside it.
However, to support the Bill without addressing the wider issues of an absence of accountable financial regulation in the State would be a mistake. We would merely create another Government agency, albeit well-meaning, without enough public oversight and accountability and with powers that might be better off exercised elsewhere. It might never be more than another quango with an expensive logo, a long name and little real effectiveness. That is not what anyone wants.
The financial crisis has exposed how we do government in Ireland and many of the serious shortcomings associated with it. Governments need to govern and not hide their failures behind the battery of regulators forced to take responsibility for legislative gaps. We need to stop plugging every hole in the dyke with a regulator. The ongoing problems in the taxi sector highlight the needless merry-go-round experienced by an industry caught between a Minister and a regulator.
We need to take stock of all the regulatory agencies we have created in the post-Thatcher, post-monetarist world and ask ourselves in whose interest they were created. In the financial sector it was clear that it was the banks and their executives that were in the driving seat. In many other cases, it was a lazy Government that did not govern but instead farmed out the difficult work and then complained when it was done badly.
Could not the core tenets of the Bill be dealt with by ministerial order? To work in debt collection, one would have to have a licence from the Department of Finance, not have a criminal record and have to have a tax clearance certificate. Perhaps this work could be done by a practising solicitor. Is this not a more suitable and efficient route to do our business?
I am a little concerned that the Bill is reflective. There has been considerable media comment on the issue and rightly so but we have a long "to do" list and the Bill's purpose might not be at the top of it. Unscrupulous and illegal moneylending is just as big a problem as unscrupulous debt collection and often involves the same people. However, because it is not on the RTE news or in the news media spotlight, we regularly overlook it. We must legislate by priority and not by headline.
I would like to discuss, on a separate but perhaps related note, a recently published——
I hope it is related.
Yes, it is. In the straitened times we are in with the lack of finance going to small and medium enterprises, very viable businesses are going to the wall simply because they cannot get the cash. In many cases, those viable businesses are owed money from customers for goods and services they have provided. The publication of the Small Claims (Protection of Small Businesses) Bill is a very welcome opportunity to deal with a pressing need. From speaking to many business organisations and many individuals in businesses, I know that trying to collect debt they are owed is a major problem. It is worth quoting the first paragraph of the explanatory memorandum of the Bill:
The purpose of this Bill is to provide an efficient and inexpensive mechanism for small business to recover small debts from purchasers. Delayed payments and bad cheques are threatening the survival of many small and medium enterprises and forcing others into insolvency. This is particularly the case where a small firm has supplied goods, or installed services, which cannot be removed or which have a short shelf life.
We know that businesses in the food service sector have been very badly hit by the lack of a reasonably cost-effective debt collection mechanism. I look forward to the Bill being moved through the House at the earliest opportunity.
Debate adjourned.