Select Committee on Enterprise and Economic Strategy debate -
Tuesday, 6 Sep 1994

SECTION 87.

Mr. R. Bruton

I move amendment No. 222:

In page 49, paragraph (d), line 40, after "effect" to insert "which has been explained to the consumer in a manner specified by the Director".

I am not entirely happy with the drafting of this amendment but it appears there is a need for consumers to be conscious of what they are signing in this instance and the implication of what is being signed should be explained to the consumer in a manner specified by the Director. This would give the consumer some warning as to the way charges are being invoked. On reflection, however, I an not certain if the amendment is entirely appropriate, and I therefore look forward to the Minister's comments on the section.

Mrs. O'Rourke

The Deputy's amendment is tabled, in the context of the section as a whole. The section gave rise to great debate and agonising. The purpose of the section is to make collection charges an optional cost to the consumer and it states:

Where the amount payable under a moneylending agreement includes a collection charge in respect of the payment of repayments at a location other than the business premises of the moneylender, the agreement shall include the following:

(a) a clear indication of the amount of that charge,

(b) a statement that the consumer shall have the option of making the repayment at the business premises of the moneylender,

(a) a statement that if the consumer exercises the option, the charge will not be payable, and

(d) a statement that the consumer may indicate his unwillingness to avail of the option by signing a statement to this effect . . .

Deputy Bruton's amendment proposes to insert, after the word "effect" in section 87 (d), "which has been explained to the consumer in a manner specified by the Director". This would require the Director to oblige moneylenders to fully explain the nature of the statement being signed by the consumer when foregoing the option of making repayments at the business premises of the moneylender, free of a collection charge.

Where optionality is prescribed, I appreciate there is always a danger that what is intended by the law is not what is undertaken. It is desirable that there be dialogue or guidance from the Director to ensure that no misunderstandings occur where there is a business premises. However, following on from a point discussed this morning, apart from the major cities in Ireland there is not a business premises of a person involved in credit where somebody can make repayments. The moneylender therefore has to visit the borrower to collect the repayments, which is a cost, and sometimes two or three visits may be required in order to collect the money and do the business.

In view of this there are collection charges, but the optionality clause should also be made clear and Deputy Bruton, in his amendment, is seeking that this be put precisely, in a format agreed by the Director. I have no difficulty with the amendment. My officials advise that the format would not have to be specific, as required by the word "specified", and the Director can advise the moneylender that there is a requirement to inform the customer about this matter.

Chairman

Is the amendment being pressed, given that Deputy Bruton appears to be dissatisfied with it?

Mr. R. Bruton

I was unsure as to whether my amendment was somewhat redundant, but it is certainly not damaging, therefore if the amendment is acceptable to the Minister I will proceed with it.

Mrs. O'Rourke

These amendments may seem like nit-picking, but I hope in the years ahead they will lead to informed consumers, and anything which contributes to that it is a good idea.

Amendment agreed to.

Mrs. O'Rourke

I move amendment No. 223:

In page 49, after line 42, to insert the following subsection:

"(2) A moneylender shall ensure that any moneylending agreement entered into with him complies with this section.".

This relates to the offence involved in contravening section 87 (2), mentioned in amendment No. 78. It ensures that a moneylender who is responsible for a moneylending agreement which does not comply with this section will be guilty of an offence.

Amendment agreed to.

Question proposed: "That section 87, as amended, stand part of the Bill."

Mr. M. McDowell

At the outset, approximately three years ago, it was originally envisaged that there would be a moneylender's office in every area and therefore the option of charges would be more relevant. However, if it is open to somebody in Cork to have his business premises in Cork, he is not being given much of an option.

Mrs. O'Rourke

Does the Deputy mean by that if somebody can go to the premises of a moneylender in Cork or Dublin the moneylender does not have much of an option?

Mr. M. McDowell

The situation is somewhat absurd, if, for example, I operate from a premises in Ballydehob and advise a woman in Ranelagh that she has an option to go to Ballydehob to make her payments.

Mrs. O'Rourke

That would not be the case; it is an extreme example. In Dublin, for instance, people could have an option.

Mr. M. McDowell

Once the geographical aspect was dispensed with it becomes somewhat unnecessary.

Mrs. O'Rourke

The optionality debate commenced at the outset.

Question put and agreed to.

NEW SECTION.

Chairman

Amendment No. 223a and 225 are alternatives, therefore, it is proposed to take both amendments together. Is that agreed? Agreed.

Mrs. O'Rourke

I move amendment No. 223a:

In page 50, before section 88, to insert the following new section:

88.—Where in a prosecution for a contravention of this Part it is shown to a court that the accused had in his possession or control any document or sum of money in circumstances which give rise to the reasonable inference that such documents or money were kept for the purpose of moneylending, it shall be presumed, unless the contrary is shown, that the accused, at the time of such possession or control, was engated in the business of moneylending.".

Deputy Quill is in favour this afternoon, whatever about this morning. We approached the Department of Justice and the Minister for Justice, and the principal of Deputy Quill's amendment was agreeable to the Minister. The matter then proceeded from the Minister for Justice to the Office of the Attorney General who further considered it.

Mr. M. McDowell

The amendment proposed by the Attorney General is a good one.

Miss Quill

I am pleased that the Attorney General advised this amendment, because it embodies the principle of what I had set out under amendment No. 225. I have inserted a cluster of related amendments to ensure that when the Bill is enacted there will be much stronger powers, at every level, to deal with illegal moneylending.

The experience in this country has been that while illegal moneylending has been widespread there have been very few convictions, if any, despite the dire consequences for vulnerable members of the community. This has been a major weakness in the way we have dealt with illegal moneylending to date, but these amendments there confer stronger more effective powers, which I trust will be enforced. This is essential if we are to assist the most vulnerable people in our society. The number of convictions to date have been very few and convictions for the most part were on the basis of documents other than documents relating to illegal moneylending. For example, in a case in Cork somebody was brought before the court because he was found to have a number of children's allowance books illegally in his possession.

Mrs. O'Rourke

He was up to no good.

Miss Quill

He was up to no good, but it was on that basis that the conviction was made. When the Bill becomes law it will be possible to obtain convictions on the basis of material in one's possession which is directly related to the trade being illegally engaged in. The amendment is sensible, and I am grateful to the Minister. Whatever their source, it would be an extremely poor Bill if these amendments were not to become part of the new legislation.

Mr. R. Bruton

I welcome these amendments. A huge problem of the previous Bill was that burden of proof was on the consumer to prove wrong doing and if the gardaí wanted to get a conviction they had to produce consumers to back them. This was never practical.

Mrs. O'Rourke

It was very rare.

Mr. R. Bruton

This is a very significant advance which I warmly welcome.

Mrs. O'Rourke

Will Deputy Quill now revoke what she said this morning, that the Bill will do nothing to banish illegal moneylending?

Miss Quill

The Bill as originally drafted——

Mrs. O'Rourke

The Deputy was talking about the Bill as it now stands.

Miss Quill

When I set out my amendments, which was long before I saw the Minister's amendments, the Bill seemed to me to be very weakly drafted. This is what I had in mind. Hindsight is great but I can assure the Minister that when I got the Bill——

Chairman

I thought peace had broken out.

Mrs. O'Rourke

Ceasefire.

Miss Quill

When I received the original draft of the Bill last April and went through it — I have plenty of experience of the activities of illegal moneylenders — I felt it was very weak and thought the balance was totally wrong. I saw all types of measures to contain and control people acting within the law and very few to contain and control people acting outside the law. This balance has been redressed and if peace has broken out between the Minister and me long may it last. As Scarlett O'Hara said — tomorrow is another day.

Mrs. O'Rourke

She did not, she said "I will think about that tomorrow" as she sank into her pillow.

Agreement agreed to.

NEW SECTION.

Chairman

Amendment No. 226 is an alternative to amendment No. 223b and both may be discussed together.

Mrs. O'Rourke

I move amendment No. 223b:

In page 50, before section 88, to insert the following new section:

88.—(1) If a judge of the District Court is satisfied on the sworn information of a member of the Garda Síochána that there are reasonable grounds for suspecting that any premises or any part of any premises is being used for the purposes of moneylending contrary to the provisions of this Part or that evidence of an offence for contravening this Part may be found in such premises, the judge may issue a warrant authorising any member of the Garda Síochána, accompanied by other members of the Garda Síochána, at any time or times within one month from the date of issue of the warrant, on production if so requested of the warrant, to enter, if need be by force, and search the premises and any person found therein and seize and retain any document or thing which such member has reason to believe may be evidence of the commission of an offence for contravening this Paart.

(2) A person shall not obstruct or interfere with a member of the Garda Síochána acting under the authority of a warrant under subsection (1).".

This amendment is along the lines we talked of earlier and arose from careful consideration of what Deputy Quill proposed in her amendment. We liked the thrust of her amendment and wanted to include it. We discussed it with the Department of Justice and the Attorney General. The Attorney General proposed a second subsection, which provides that obstruction or interference with a garda acting under subsection (1) is an offence. I will submit an amendment to section 12 on Report Stage to include the offences raised here in the list of offences contained in subsection (2) of that section. The thrust of this amendment and amendment No. 226 are the same. The amendment increases the Bill's enforcement powers.

Miss Quill

I am very pleased with this. It is excellent.

Amendment agreed to.

Amendent Nos. 224 to 226, inclusive, not moved.

Section 88 agreed to.