I propose to take Questions Nos. 56 to 58, inclusive, together.
The majority of hire purchase agreements, such as PCPs, are provided to consumers through credit intermediaries. Under the Consumer Credit Act 1995, credit intermediaries are authorised by the Competition and Consumer Protection Commission (CCPC) and when performing intermediary functions credit intermediaries are required to disclose certain information in writing to the consumer including the nature of the financial accommodation and details on the amount, number and frequency of payments, the total amount the consumer would have to pay under the agreement and, where applicable, the APR.
While intermediaries are frequently involved in the process, hire purchase agreements are ultimately provided by hire purchase providers and these providers are the entity which is the “owner” of the good let to the consumer under the hire purchase agreement. While hire-purchase providers themselves are not required to obtain a specific authorisation from the Central Bank (or the CCPC) for the provision of hire-purchase agreements, nevertheless this is an activity which is subject to statutory control and which contains important consumer protections. For example, Parts II and VI of the Consumer Credit Act provide that important information be disclosed in advertisements for hire purchase agreements and also in such agreements as entered into by consumers. This includes information on the cash price of the good, as well as the APR and hire purchase price.
Nevertheless, it is important to ensure that the regulatory framework governing the provision of PCP and hire purchase agreements is kept under review to ensure that the level of consumer protection continues to be robust. Following reports on the PCP market by the CCPC and the Central Bank, last summer I asked Mr. Michael Tutty to conduct a review of the PCP market and regulatory structure and his report was subsequently published by my Department last November. That report found that there was currently no evidence of consumer detriment arising from PCPs but nevertheless it set out a number of recommendations to help avoid possible problems arising in the future. The CCPC and Tutty Reports suggested that it would be desirable to ensure that certain provisions of the Consumer Protection Code (CPC) , in particular the relevant provisions on “knowing the consumer and suitability” should be applicable to PCP and hire purchase agreements and that the appropriate legal means of doing so should be investigated further. I have previously indicated that I broadly accept the recommendations and conclusions of the Tutty report and my Department is currently consulting the Office of the Attorney General on some specific issues raised in the report (including those in relation to the CPC). When a response is to hand, my Department will further engage with the Central Bank, the Department of Business, Enterprise and Innovation and the CCPC on this matter. Also, in relation to the requirement to check the financial position of the consumer before he/she may enter into a PCP or hire purchase agreement, as the Deputy will be aware the Markets in Financial Instruments Act 2018 now provides that hire purchase and similar type agreements now fall within the scope of the Central Credit Register.
It is also important to enhance the level of public awareness of PCP products and to provide information in relation to financial services more generally, including information in relation to the costs to consumers and the risks and benefits associated with the provision of those services. In this context the CCPC has conducted several awareness campaigns in relation to PCP car finance in 2016, 2017 and 2018, and I am advised that it is developing a further campaign for 2019. I am informed that part of the CCPC’s information campaigns relates to the implications of a poor credit rating on future financial requirements.