Dáil Éireann díospóireacht -
Wednesday, 30 Jan 2002

Vol. 547 No. 1

Written Answers. - Licensed Money Lending.

John Dennehy

Ceist:

92 Mr. Dennehy asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of persons and institutions, other than commercial banks, building societies and credit unions, commonly known as money lenders, which are licensed to provide money here; the amount of money owed to such persons or institutions; if she is satisfied that legislative safeguards are sufficient to protect persons from excessive interest charges; and if she will make a statement on the matter. [1053/02]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. T. Kitt)

The Consumer Credit Act, 1995, requires those engaged in the business of being money lenders to hold a licence granted for that purpose by the Director of Consumer Affairs. Such licences are renewable on a yearly basis. There are currently 60 lenders licensed by the director to engage in the business of being money lenders. From financial returns made by licensed lenders to the office of the Director of Consumer Affairs, it is estimated that approximately £53 million was owed to licensed money lenders as of the middle of 2001.

The Consumer Credit Act entitles the director to refuse to grant a money lenders licence on the grounds that, in her opinion, the cost of credit to be charged is excessive. The director is aware that the cost of credit provided by licensed money lenders is expensive. Her office has examined the licensed moneylending sector and is satisfied that the cost to lenders of providing the service in terms of overheads, etc, can also be high. I share the director's concern as to the limited access that customers of licensed money lenders have to more mainstream sources of credit. However, I also agree with the director that there is a need to ensure that licensed lenders are not forced out of business with the consequence of being replaced by illegal and unlicensed lenders who may charge much higher rates of interest and/or employ unacceptable collection practices.

A general guide to the various protections afforded to borrowers under the Consumer Credit Act is available from the Office of the Director of Consumer Affairs. Consumers who have any queries in relation of credit matters may also contact the ODCA helpline at [phone].

John Dennehy

Ceist:

93 Mr. Dennehy asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of retail institutions licensed to provide credit by way of in-store credit or finance packages; if her attention has been drawn to the amount of money outstanding to such institutions; if she is satisfied that existing legislative requirements are sufficient to ensure that consumers are fully aware of their rights and of the potential costs involved; and if she will make a statement on the matter. [1054/02]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. T. Kitt)

Retailers providing credit via in-store charge cards or by other arrangements with finance houses, which are not deposit takers within the meaning of the Central Bank Acts, do not require a license from any authority to do so. However, if a retailer is paid a commission or consideration for arranging credit with a finance provider they must hold a credit intermediaries authorisation granted for that purpose by the Director of Consumer Affairs. Retailers arranging credit for consumers through licensed money lenders do not themselves require an authorisation or a licence but the money lender providing the credit must hold a licence granted for that purpose from the Director of Consumer Affairs. Neither my Department nor the office of the Director of Consumer Affairs has access to statistics on amounts outstanding on foot of in-store charge cards or other types of finance.

The Consumer Credit Act, 1995, which is enforced by the Director of Consumer Affairs contains general provisions in relation to the form and content of all credit agreements. These include requirements to specify the amount of credit lent, the amount of each repayment instalment, the rate of interest charged and the APR, together with particular provisions in relation to specific agreements such as hire purchase agreements. A general guide to the Consumer Credit Act, outlining the various protections afforded to borrowers under the Act, is available from the Office of the Director of Consumer Affairs. Consumers who have any queries in relation to credit matters may also contact the telephone helpline of the Office of the Director of Consumer Affairs at [phone].