asked the Minister for Industry and Commerce the regulations governing the establishment and operations of household management firms; and whether he is satisfied that the interests of clients are being safeguarded.
24.
Ceisteanna—Questions. Oral Answers. - Household Management Firms.
23.
asked the Minister for Industry and Commerce if he will consider introducing legislation so that firms engaging in the collection of debts, accepting money wherewith to pay bills, or any such activities will be compelled to enter into a bond sufficient to ensure that in the event of their collapse clients' interests are safeguarded.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 23 and 24 together.
There are at present no regulations governing the activities of household management firms.
Since a previous question on this subject in February last I have made a preliminary examination and I am disposed to think that the activities of these firms should be regulated by legislation. I am, at present, considering what form this legislation might take and I shall have to look at the practical problems involved before reaching a final decision. I hope to make a statement on my conclusions before long.
If the Minister waits much longer they will all be broke. Is the Minister aware that in the last week another individual has gone broke? Will he not bring in legislation immediately to ensure that these firms are licensed or at least have an insurance bond? One has gone broke in the Artane district. Five hundred people are involved in this. Is it not possible for the Minister, with the help of the Minister for Local Government, to get the corporation to take this in hand? These companies are used mainly for rates and repayments on houses. Could the corporation do it and charge the 5 per cent that these people charge?
I should like to know from the Minister when his Department first became aware of these operations? These are, as I see them, banking operations and some of these companies, I understand, have been operating for the last four to five years. Would there not be an onus on the Minister's Department to protect clients from such operations?
I only became aware of the problems that can arise from a situation like this when Prudential Estates Ltd. failed in January of this year. As I indicated to the House, arising from a question addressed to me in February last I instituted an investigation with a view to seeing if it were possible to introduce speedy legislation. As I have just said it is my intention to make a statement on my conclusions before long.
In reply to Deputy Belton's supplementary question I am most anxious not to rush in with some sort of speedy legislation that could be found faulty——
And have to withdraw it again.
——in an effort to control this. I do not accept that the problems are altogether in relation to payments to Dublin Corporation. There are payments to building societies, payments to insurance companies, payments to the ESB. There are a number of factors involved.
I am also aware of the fact that a number of other groups are at the moment operating this type of collection and payment service. I hope that they will agree with whatever measures I bring in so that I can have a proper type of registration to control those firms in order to safeguard the interests of the people who subscribe or pay their moneys in this manner and ensure that they are properly protected from the type of thing which has happened on a couple of occasions this year. This has happened only in very recent times.
Is it not possible that they are covered by existing legislation in view of the fact that they carry on a banking business?
I have checked and they are not covered by existing legislation.
May I take it that since I raised this matter last February the process of investigation has been a continuing one and that the Department have not just suddenly wakened up again to this problem as a result of the recent collapses? May I take it that it has been a continuing investigation since that time?
It has been. A meeting took place in the meantime between officials of my Department and people who were conducting this type of business. Representations were received from them expressing the wish that the regulations should not be too severe and would not be actually prohibitive from their point of view. This type of service if properly conducted is one which can be of benefit to the people. On the other hand my responsibility is to protect the individual subscriber or the individual payer of those moneys from exploitation.
There are some of these firms operating at the moment which are very good and are giving a useful service but would the Minister have legislation brought in very quickly because in most areas in Dublin where there are anything from 500 to 1,000 houses these firms exist, some good, some bad? Many more of these cases will occur unless legislation is introduced speedily.
Can anybody open a business like this at the moment?
There is nothing to stop anyone.
Is the Minister telling us that it is extremely difficult for him to control this type of business? Has Deputy Belton not suggested a simple answer—that the Minister should arrange that people who want to enter this business will simply negotiate with an insurance company and take out a bond to cover the amount of business they are going to transact? Is that not the simple answer instead of making a song and dance about it?
This impression of there being a simple answer is the reason why it is not possible to come in with rushed legislation.
It is not legislation. A regulation would do that.
Order.
A firm could take an insurance bond for say £5,000 and go ahead and do £30,000 worth of business.
Not at all.
Yes. It is necessary to be quite careful with my legislation to ensure that that type of thing will not happen.