Dáil Éireann díospóireacht -
Wednesday, 17 Apr 1991

Vol. 407 No. 1

Adjournment Debate. - Repossession of Cars.

Mr. Callely

I welcome the opportunity of bringing to the Minister's attention the serious matter whereby financial institutions order the repossession of motor vehicles. One of my constituents had his car repossessed and his case is a good example of what happens.

My constituent purchased a pre-owned motor vehicle via the national papers by private treaty. He paid cash for the vehicle and received an official receipt. He completed the official motor registration change of ownership form and received the original and official tax book in which he was later registered as the owner. Like most ordinary innocent individuals my constituent was happy with his purchase. One can fully appreciate and understand his shock and horror when 11 months after he purchased his car it was taken from outside his home. However, that was only the start of his problems.

Once he got over the initial shock he went to his local Garda station to report the unauthorised taking of his vehicle. He was advised by the gardaí that his car had been repossessed by one of the leading banking institutions as there was an outstanding debt due on it and was told that he should contact them. I was astonished when this matter was brought to my attention. I rang the Garda station and asked them to record the unauthorised taking of the vehicle, which is exactly what happened. After that I contacted other Departments. It is not right that a person who purchases a motor vehicle in good faith and goes to the trouble, which many people do not, of completing the official motor registration change of ownership form so that he is registered as the owner, should have his car taken in this way.

One might say that there is an institution who can advise people on whether there is an outstanding hire purchase arrangement on a vehicle. All I can say to that is that my constituent was not aware of this. I wonder how many people are unaware of the existence of this institution which can give advice on such matters. One could pose the question: does this relate only to hire purchase arrangements? With the development of financial services, lease acquisitions and other financial arrangements I wonder if any institution would be able to say the exact arrangements made in regard to any motor vehicle.

I wish to quote from correspondence I received from Dublin Corporation's motor registration office which states:

The licensing authority is concerned with the registered ownership of a vehicle and not the legal ownership. A person in whose name a vehicle is registered may or may not be the legal owner of that vehicle. Ownership is defined in regulations as the person by whom the vehicle is kept.

I received a letter from the solicitor acting on behalf of the banking institution in which he stated:

We are instructed to advise our clients are the legal owners of the vehicle and purchased same for the purpose of leasing same to one of its customers.

I am concerned that innocent individuals who purchase pre-owned vehicles and receive an official registration book registered in the name of the person who is selling the vehicle can have their cars repossessed with the co-operation of the local gardaí. There are many questions I should like to ask in regard to this matter but I cannot do so in the time available to me. Legislation should be introduced to deal with this problem.

This issue has been brought to the attention of the general public by way of a popular radio show. Many people who have found themselves in the same position as my constituent phoned the presenter of this radio show to talk about their experiences. We should introduce legislation or bring in regulations to prevent such incidents. I ask that this very simple request be addressed by the Minister. The easiest way to deal with this problem would be to provide that the person who has legal ownership of the vehicle should be the registered owner. In this way one could easily find out if a banking institution has an interest in the vehicle. I look forward to hearing the Minister's reply.

Minister for Industry and Commerce (Mr. O'Malley)

I am aware of the problem raised by Deputy Callely which has received extensive coverage in the media. I share the Deputy's concern for the difficulties and distress caused to persons who find themselves in this type of situation.

The difficulty arises where a person purpose to sell a car to another person and the purchaser subsequently discovers, much to his cost, that the seller was not the car's legal owner. Ownership of the vehicles comprehended by some credit transactions is retained by, and still reside with, the provider of the credit. I should point out that such arrangements are perfectly legitimate. In some instances, such as hire purchase, the agreement for the giving of credit will provide for the transfer of ownership at the end of the period of the agreement but in certain leasing transactions there is no provision for the ultimate transfer of ownership.

Such responsibility as I might have in this area derives from a general responsibility in the matter of consumer credit. I regret that there is no action open to me to resolve difficulties of the kind to which the Deputy has drawn attention.

Prima facie, an action of this kind may entail fraud which should be reported to the gardaí and any question of recovery of moneys paid over is a civil matter to be resolved by the courts. However, I would remind the House, that the registration documents of a vehicle are often used to establish the credibility of the seller in such cases. It is important to reiterate that possession of such documents is not a proof of ownership. Indeed the tax book clearly states that the registered owner for motor tax purposes is not necessarily the legal owner. Any changes in the form of the tax book would be a matter for the Minister for the Environment who deals with such matters. I will draw his attention to this problem and he may consider it appropriate to put an even stronger notice in the motor tax book.

Traditionally, in the matter of the buying and selling of goods there was a philosophy of caveat emptor, let the buyer beware. While this has changed to a considerable degree because of the introduction in recent years of a considerable body of legislation which affords consumers specific rights and protections, it is an approach which is still obviously worth observing in cases entailing the purchase of used cars. In the case of car purchases members of the public can best do this by availing of a facility provided by a body called the Hire Purchase Information Ltd., 20 South William Street, Dublin 2, telephone No. 6794522. This body maintain a register of vehicles which are the subject of hire purchase or leasing agreements and on the payment of a fee of about £4 will provide information to a member of the public with regard to whether such an agreement exists in relation to a particular vehicle.