Vol. 363 No. 5
asked the Minister for Justice if, in view of the startling revealations on money lending in Wexford particularly and in the country generally as portrayed on "Today Tonight" programme on RTE, he will immediately initiate an investigation into the operations of such licensed and unlicensed money lending businesses; and if he will make a statement on the matter.
12.
asked the Minister for Justice if he is aware of reports that many licensed money lenders are imposing additional charges for such items as collection of repayments, which have the effect of raising the real rate of interest above the permitted legal level; if he intends to take any measures to protect borrowers against this activity; if he will request the Garda to carry out an investigation into allegations of breaches of the Moneylenders Act, 1933, as outlined in the "Today Tonight" programmes on RTE on 3 and 4 December 1985; and if he will make a statement on the matter.
13.
asked the Minister for Justice the steps he proposes taking to amend the legislation dealing with moneylenders.
16.
asked the Minister for Justice the action he proposes to take to regulate and control the operation of money lenders.
59.
asked the Minister for Justice the number of convictions obtained in breach of the Moneylenders Act in the years 1980 to 1985, inclusive.
60.
asked the Minister for Justice in view of the very serious problems of money lending if he has any plans to update the Moneylenders Act, 1933; if so, when the new legislation will be introduced; the plans he has to deal with this problem of illegal moneylenders; and if he will make a statement on the matter.
61.
asked the Minister for Justice in view of the recent revelations in the "Today Tonight" programme on money lending, the action he proposes to take to stem the abuses to which many unfortunate people are being subjected; if he is going to take action against those people who are known to be abusing the law; if he has any plans to update and strengthen the law; if he is satisfied that the existing law is sufficient to cover the apparent widespread abuses; and if he will make a statement on the matter.
62.
asked the Minister for Justice if he intends to review and update the Moneylenders Act, 1933, in view of the enormous social consequence of the operation of unlicensed moneylenders and the exorbitant interest charges being charged by the licensed and unlicensed lenders; and if he will give an undertaking to discuss and consult with credit unions, St. Vincent de Paul and other groups dealing with the situation on the ground.
63.
asked the Minister for Justice if he will make a comprehensive statement on: (a) the extent of illegal money lending throughout the country; (b) the success of the Garda in dealing with the problem and the number of prosecutions each year for the last three years; and (c) the assurances the public can have that those engaged in the activity will be put out of business as a matter of urgency.
(Limerick East): I propose to take Questions Nos. 3, 12, 13, 16, 59, 60, 61, 62 and 63 together.
I am informed by the Garda authorities that the Garda pursue actively all alleged breaches of the law in relation to moneylenders. In keeping with this policy all divisional officers had investigations carried out following the allegations of irregularities by moneylenders which were made in the media in November and December last year. All of the matters concerned are still under investigation but, so far, in the majority of cases these investigations have not uncovered evidence to substantiate the allegations made. Some evidence of irregularities was found to exist in the areas of Cork, Galway, Waterford and Wexford.
This, however, must be assessed in the following context. First, a difficulty nearly always encountered by the Garda in investigating the recent allegations against moneylenders, and indeed on previous occasions, is that in many cases the persons making the allegations or the borrowers in question are either unable or unwilling to give information.
Secondly — and this is of central importance — most of what may be described as irregularities in the matter of moneylending are not criminal offences. In many important instances the Acts do not create offences at all and, therefore, do not provide for a criminal sanction but only for a restriction on the civil right of the moneylender to recover a debt in the courts. Accordingly, the remedy provided by law does not rest with the Garda — even when they get full co-operation from the borrower — but with the borrower himself if the moneylenders seeks to bring civil proceedings against him.
A case in point is the matter of interest and related charges. There is no power vested in the Garda to prosecute for excessive charges. Charging more than 39 per cent is not a criminal offence. The figure is mentioned in the 1933 Act in the context of a provision which allows a court, in proceedings brought by a moneylender for the recovery of money lent, to re-open the transaction and give equitable relief if the transaction is harsh and unconscionable. The court must conclusively assume that it is such a transaction if the interest exceeds 39 per cent simple interest but can give relief even where the interest is less. Charging more than that rate of interest could also be significant in the context of applications for renewal of certificates of fitness.
The scope for Garda procedures, even where the facts alleged are provable, is therefore very limited and the Garda statistics which follow should be read against that background. They show that there were no prosecutions for offences in the moneylending area in the years 1980 to 1983, inclusive. In 1984 one person was convicted of unlicensed moneylending and assault. In 1985 one licensed moneylender was convicted of opening for business on Good Friday and another person was prosecuted for 11 offences related to moneylending, that is, four counts of unlicensed moneylending and seven counts of assault. He was convicted for eight of these offences and the other three still have to be dealt with.
I have been asked if I would be willing to discuss and consult with interested groups in relation to the problems. I would welcome the views of these groups but I believe that those who have considered the matter in some detail are alive to the fact that it is part of a complex problem that is not necessarily eased but that could, on the contrary, be worsened by legal provisions that might superficially sound right. In those circumstances, I do not consider that the matter would best be approached by my meeting some interested group but, rather, by their setting out their own considered views in writing and I suggest that they submit their views to me in writing.
Some of the questions refer to amending the law. I will, of course, consider introducing any amending legislation that may be necessary. I wish to assure Deputies that I will keep the subject of moneylending under review. Decisions on any further action, either by way of enforcement or by amending legislation, will be taken in the light of developments in the present Garda investigations and points made in any submissions by interested groups. However, in saying this, I am not to be taken as saying that this area is necessarily one that I should continue to deal with. It may appear, as consideration of the matter develops, that it would be regarded as something to be dealt with in the wider context of social legislation, credit control and/or consumer protection.
When I answered questions on various aspects of moneylending in 1984 and 1985 I suggested that Deputies should bring any particular cases they have in mind to the notice of local gardaí. I would like now to reiterate that suggestion.
I have listened to the Minister and I am very disappointed because he appears to be giving the impression that this matter is not nearly as serious as it is. I should like to point out to him that in Wexford town, which has a population of 13,000 people, there are 5,000 accounts. Is he aware that since the RTE programme — I should like to compliment them on that programme — the problem has got worse. Is he aware that moneylenders are blantantly breaking the law by charging an interest rate as high as 285 per cent? He has told the House that the total permitted rate is 39 per cent. How can unlicensed people operate with such obvious and complete freedom?
(Limerick East): I am not aware that the situation has become worse in recent weeks or months. Secondly, charging an interest rate in excess of 39 per cent is not a criminal offence ——
Even if it is up to 285 per cent?
(Limerick East): Even if it is over 39 per cent it is not a criminal offence and the Garda cannot arrest and prosecute somebody under the criminal law because there is no criminal law that is applicable. However, there is a provision in civil law which enables the person who owes the money to go to court. Where the interest rate is in excess of 39 per cent and when proceedings are brought by a moneylender for recovery of the money lent the court can find in favour of the person who has borrowed the money. The recourse is in civil law, not criminal law. I have no idea if what the Deputy has said about the level of interest rate is true, but if it is in excess of 39 per cent the recourse in law is in the civil code and not in the criminal code. With regard to the final point made by the Deputy, if he is aware of unlicensed moneylenders operating he should give their names and addresses to the Garda Síochána.
The Minister's answer was important and revealing in relation to action which the Garda Síochána can take. Many of us were under the impression that they could deal with these matters as criminal offences but the Minister has now told us that is not so. He stated that the Garda can refuse a certificate of fitness to somebody who has been charging an excessive rate of interest. Can he give us any idea to what extent the Garda are using this power to refuse certificates of fitness?
(Limerick East): It is not a matter for the Garda Síochána. Every moneylender is required to take out an annual licence from the Revenue Commissioners in respect of which a duty of £100 is payable. A licence may not be granted to a person unless he obtains a certificate of fitness from the District Court. The procedure is that the certificate of fitness has to be got in court and obviously anybody can object to that, including the local Garda through the superintendent or inspector, and the Deputy could also object. If the certificate of fitness is not given by the District Court the Revenue Commissioners cannot give a licence and if a person operated without a licence he is in breach of the law and can be prosecuted.
I am very surprised at the attitude of the Minister. He has tried to give the impression that he is not aware of unlicensed moneylenders when every dog in the street knows they are operating. Is he aware of the fear on the part of those to whom money has been lent? Is he aware of the tension in such families and the fear caused as a result of tactics used by these people? What does he intend to do to protect them from such tactics?
(Limerick East): The trouble about every dog in the street knowing that something is happening is that dogs in the street are notoriously reticent about giving information to the Garda Síochána. If Deputies, including Deputy Byrne, have information to give to the Garda Síochána about the abuse of the Act they should give that information and allow the Garda to proceed against a person if he is in breach of the criminal law. I know fear can be created by moneylenders and it is one of the problems of the Garda Síochána when they come to get information about the activities of moneylenders. I do not think we should highlight over-much strong arm tactics if and when they take place, and I have no specific information that they do. Something far more simple operates, namely, that people who borrow are afraid to complain lest the next time they are in need they will be unable to get a loan. Thus, they are reticent about giving any information to the Garda Síochána. If the Deputy wishes he may come to my office and I can go over the recent set of complaints for his own constituency and his county. I can show him of instances where the Garda approached people and information was not forthcoming. It is not because of strong arm tactics but because they are afraid they may be in need again. They may need money for a suit for a child for first communion or for a death in the family and they will have nobody to go to. Therefore they will not give information.
The Minister has touched on an important point. Will he not agree that what is at fault is our social welfare system which does not adequately protect people in such a situation? People in need would not get into the hands of moneylenders if the social welfare system were adequate. It is falling down in not protecting them from these unscrupulous moneylenders. Will the Minister indicate what evidence is required by the Garda Síochána in order to have the matter listed as a valid complaint? Is it evidence that must stand up in court or is it simply valid information that a person must supply in order for a complaint to be registered? Will the Minister confirm that the operation of unlicensed moneylenders is a criminal offence and that the Garda are obliged to prosecute if evidence is brought to them?
(Limerick East): The answer to the last part of the Deputy's question is yes. With regard to evidence, the Garda would require evidence to stand up in court before they could take a criminal prosecution. That is self-evident. In the case of objecting to somebody on the grounds of fitness to hold a licence, I think hard information provided by reasonable people in the community would mean it could be presented in the court. However, it would not necessarily be conclusive because it would be a matter for the District Justice to provide the certificate of fitness in any event.
I do not accept Deputy's criticism of the social welfare code. In many cases people with large incomes from social welfare can become the prey of moneylenders while people with small social welfare payments are never in the hands of moneylenders. The point is there are many people who will not be given unsecured loans by the banks or the financial agencies and if they want a loan they have to go to the moneylenders. My best advice to people is to work through credit unions who have been very effective in providing loans for short periods. All Deputies should tell their constituents not to go to moneylenders. They should be advised to become customers of their local credit unions and work through them.
Will the Minister state the number of licensed moneylenders at present? Is the number tending to increase or decrease?
(Limerick East): I have not that information to hand. I will try to provide the Deputy with it subsequently.
I should be greateful for that also. Would the Minister agree that there is a serious social problem in this area and that the fact that there were no prosecutions during such a long period indicates that perhaps the problem has not been pursued as actively as it should be pursued or else that it is very difficult to come to grips with the problem? One way or the other, is the Minister prepared to give an undertaking to have the matter reviewed with the Garda following the discussion here today in an attempt to reach a decision as to what can be done about what is a very serious social problem, as people on both sides of the House will admit?
(Limerick East): I am not sure as to how big the social problem is in this area but I am prepared to accept that people in all sectors of society have the experience of borrowing money they cannot pay back. I do not accept that the Garda have not been diligent in investigating complaints made to them. I repeat that many of the areas of complaint do not constitute criminal offences and that consequently there cannot be prosecutions. Also, it is notoriously difficult for the Garda to get information from people who borrow from moneylenders. This is for the reasons I have outlined already.
That is the point. There seems to be some difficulty. Nobody here is suggesting that the Garda are not diligent in their work but in the area we are talking of the culprits are not being prosecuted. As Members have pointed out, there seems to be a large number of unlicensed moneylenders in operation. Therefore, would the Minister agree to review the position?
(Limerick East): I am prepared to take advice from any Deputy on any side of the House as to whether we need legislative change in this area but this might be an appropriate area for the committee on legislation to deal with.
I assure the Minister that the problem is a very serious social one and is becoming worse because of the increasing poverty levels. Regarding the matter of certificates of fitness which appear to constitute the only area in which the Garda can act, that is by way of objecting to the issuing of such certificates in cases where they have information that the applicant concerned is exceeding the maximum interest charges or is charging for collection, can the Minister say whether he will instruct the Garda to object in all such cases at the time of the application for the renewal of certificates of fitness. I am aware that the information would not be available in all cases but we know that the RTE team were able to elicit information, so some people are prepared to talk.
(Limerick East): I am prepared to take any advice the Deputies offer but I assure the House that the Garda have been very diligent in pursuing these cases. I have read the reports that resulted from the RTE inquiry and I am aware that the Garda have approached people in different parts of the country who were named in that programme or who were suggested and that they have been trying diligently to bring about prosecutions. Some cases are pending. They are being discussed with the law officers and prosecutions will ensue.
I have now found that section of my brief which deals with the numbers of licences granted in the various years. To the end of October 1985, the number was 109. The number of licensed granted in recent years, with the exception of 1984, when the figure was 128, has declined. In 1983, the number was 114, in 1982, 116, in 1981, 116, in 1980, 116, in 1975, 123, in 1972-73, 121 and in 1968-69, 128. As the legislation was enacted in 1933. I am giving some figures for the thirties and forties. These are: 1940-41, 140, 1939-40, 146, 1938-39, 153 and 1937-38, 157.
I will allow one further supplementary on this question.
The Minister may be aware that only those who are not in a position to obtain a loan from any other source approach the people we are talking of. This involves the borrower in repayments at interest rates of more than 280 per cent as opposed to the maximum rate allowable of 39 per cent. In these circumstances the borrowers would be bound to find themselves in severe difficulties. Would the Minister agree, then, that there are serious social problems surrounding this whole area? He has said——
Is this a question? The Chair allowed the Deputy ask this final supplementary but the Chair did not expect his contribution to be of such length.
The Minister has implied that the level of investigation has increased but can he say to what degree it has increased and whether all of those who participated in the television programme and who appeared to be very forthcoming have been visited by the Garda?
(Limerick East): I am in general agreement with what both Deputies are saying but the matter is being put in an exaggerated way by Deputy Byrne particularly.
That is not the case.
(Limerick East): I do not have the precision of information the Deputy seems to have. He should forward any precise information he has to the Garda. Regarding Garda investigations arising from the Sunday Press report and the RTE programme, the areas mentioned were Cork, Galway, Limerick, Waterford and Wexford. I understand that investigations are being carried out in these areas. In Cork east, for example, the Garda have discovered one case. That is still under investigation and will probably be brought before the courts. In Cork west the Garda are investigating the possibility that loans were being solicited by a Cork based firm of moneylenders. In Galway the Garda are investigating the legality of certain moneylenders. In Waterford an investigation is under way into a Cork based company who have clients in Waterford. The Deputies will appreciate that I cannot give precise information about investigations that are continuing but I assure them that any charge that was made either in the Sunday Press of 1 December or on the RTE programme is being followed up diligently by the Garda. They would appreciate any further information that can help to cast light on their investigations.
I am calling Question No. 4.
I asked the Minister——
I am not allowing another supplementary.
I asked whether those people who were forthcoming on the television programme have been visited but I have not received a reply.
I am calling on the Minister to answer Question No. 4.
