Vol. 504 No. 5
26 Mr. J. O'Keeffe asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has satisfied herself with the present level of consumer protection for the purchasers of cars; and if there is any evidence of secret commission payments in the financing of car purchases. [12288/99]
The Consumer Credit Act, 1995, which came into effect on 13 May 1996, allocated responsibility for authorising credit intermediaries to the Director of Consumer Affairs. The Act defines a credit intermediary as a person, other than a credit institution or a mortgage lender, who in the course of his business, arranges or offers to arrange for a consumer the provision of credit or the letting of goods in return for a commission, payment or consideration of any kind from the provider of the credit or the owner, as the case may be.
A considerable number of credit intermediaries currently authorised by the Director operate in the retail motor trade. The Act obliges a motor trader who, being an authorised credit intermediary, arranges finance for a customer to purchase a car, to disclose certain information to the customer before any agreement regarding the purchase is entered into. The information which the motor trader is required to disclose includes the fact that the seller receives a commission, payment or consideration of any kind for arranging any such financial accommodation between the consumer and the undertaking.
I have no knowledge of secret commission payments in the financing of car purchases. Any breaches of the relevant requirements as set out in the Consumer Credit Act, 1995, are a matter for the Director of Consumer Affairs, who has assured me that her office will vigorously pursue any specific complaints in this area.
Will the Minister of State investigate this matter further? I have been told by a reputable person in the financial world that customers are being ripped off by some finance houses with the co-operation of some garages. I am also informed that there are secret commission arrangements, whether by way of hard cash or trips to the Monaco Grand Prix. If that is so, it must be the job of the Minister of State to stop it. The buyer of the car, who is paying the piper, is not in that case calling the tune. He does not even know the tune. Will the Minister of State take steps to have this fully investigated so that if this practice is being carried on by some finance houses and garages a stop is put to it?
I will obviously pursue it further but as yet there is no record of a complaint. Given the way the system operates we encourage people to complain to the Director of Consumer Affairs, who will then pursue this matter vigorously. I assure Deputy O'Keeffe that I will raise this matter with the director again. This kind of practice is totally unacceptable and should be pursued.
Does the Minister of State know whether the modest fee which dealers in this situation are required to pay to the Office of the Director of Consumer Affairs is being complied with? If he does not, he should communicate later with me and other Deputies. I do not know if the Minister of State recalls the time I brought—
Ceist, le do thoil.
It is a cheist: does the Minister of State recall? With all due respect, the Leas-Cheann Comhairle is taking a very interventionist policy this afternoon—
It is the purpose of Question Time. It is not the fault of the Chair. New Standing Orders were laid down which limit the time in fairness to other Members in the Chamber who are entitled to ask a question.
Will the Chair tell me if I say to the Minister of State: "Does the Minister recall" whether that is a question? How would you put it?
As Deputy Rabbitte is well aware, one could make a Second Stage speech asking questions in that form. The purpose of Question Time is to elicit information from the Minister. I ask the Deputy to ask a question.
That is precisely what I am trying to do, Sir, and I suggest to you that if you stopped intervening there would be more time for those of us who put down questions.
Does the Minister of State recall that when the Act was being debated, SIMI, on behalf of the motor industry, indicated that it would face extinction if it had to pay this moderate fee to the Office of the Director of Consumer Affairs? Will the Minister of State inform us to what extent that is being complied with?
Yes, I will get that information for the Deputy. I do not have the answer to his question here but I will investigate the matter further and convey the information to him directly as soon as I get it.
May I explore further the issue I have raised? Is the Minister aware of systems of loyalty payments, commissions paid by finance houses and outings hosted by finance houses for the staff of garages which deal exclusively with those finance houses? How is the customer made aware what proportion of the cost of these payments are met by him? Some of this information is not readily available but it ought to be given to the car purchaser who pays for these commissions and this hospitality.
Section 148 of the Consumer Credit Act, 1995, lays down certain obligations. When the consumer negotiates with a seller in respect of the acquisition of goods certain things must be done. The seller must disclose in writing to the consumer (a) the nature of the financial accommodation, (b) the amount, number and fre quency of payments and the total amount the consumer would have to pay under an agreement, and, where applicable, the APR, (c) who has the property in the goods during the agreement, (d) the name of any undertaking for which the seller acts as a credit intermediary and (e) – perhaps the most relevant obligation – that the seller receives a commission, payment or consideration of any kind from an undertaking for arranging any such financial accommodation between the consumer and the undertaking. The Act does not require the seller to divulge the extent of the commission.
Does the Minister of State agree that there should be such an obligation on sellers? Will he amend the regulations to ensure that the amount of the commission is disclosed?
This legislation was discussed extensively and other Members in the chamber were very closely involved in that discussion. If additional protections are required I will be happy to examine that matter. I have given the Deputy commitments on a number of matters today and I will pursue those.
