Vol. 1035 No. 1
58. Deputy Pearse Doherty asked the Minister for Finance if he will consider the introduction of targeted and temporary mortgage interest relief to absorb a portion of increased interest costs since June 2022 on primary dwelling home mortgages; and if he will make a statement on the matter. [11517/23]
Cuirim fáilte roimh an Aire Airgeadais. Tá an chéad cheist ag an Teachta Ó Dochartaigh.
Tá a fhios ag an Aire - agus tá le tamall - go bhfuil an ECB ag cur rátaí morgáiste suas le 3%. The European Central Bank, ECB, has increased its key interest rate by 3% and it is expected to go up, on 16 March, another 0.5% with further increases flagged for later in the year. These increases have not worked fully through the Irish system uniformly. However, there are certain categories of borrowers who have already been impacted by these rate hikes. I again ask the Minister to consider the introduction of targeted, temporary mortgage interest relief to support these hard-pressed households.
As I have stated previously in the House, the position is that the formulation and implementation of monetary policy in the eurozone and the setting of official interest rates is an independent matter for the ECB. The Government has no role in setting official interest rates, nor in setting the retail interest rates that lenders may charge on their loans, including mortgages. That is a business and commercial matter for individual lenders.
In relation to mortgage interest relief, and as the Deputy will be aware, the relief for principal private residences was phased out on a gradual basis over the period of 2009 to 2020. It cost more than €700 million in 2008. Prior to its curtailment and eventual abolition, the top two income deciles in 2005 accounted for close to half of the tax forgone through tax relief. This issue was highlighted in the findings of the 2009 Commission on Taxation report. The relief cost approximately €280 million in 2005.
While I am acutely conscious that there have been increases in certain mortgage rates by a number of lenders, it is important to point out that mortgage interest rates, in particular fixed interest rates, have fallen over the past number of years. For example, in December 2014, the average level of fixed interest rates for new lending was 4.11% compared with 2.61% in December 2022. The Irish average interest rate on new mortgages is now below the eurozone average. In December, Ireland had the third lowest mortgage rates in the eurozone. The differential between the Irish and average eurozone interest rates for new mortgages declined from 1.40%, at the end 2021, to -0.26% in December 2022. The data also indicate that a significant portion of new mortgages, over 93% in December 2022, are now fixed rate mortgages and this will protect borrowers in the event of a rise in official and market interest rates, at least for the period that the interest rate is fixed.
The Minister talks about the interest rate in terms of new mortgages, and I do not dispute his facts, but will he acknowledge, when all outstanding Irish mortgages are taken into account, that they are significantly higher than the European average? In December, they were 2.88% while the European average was 1.89%. Ireland's mortgages are actually much higher than the European average. Some 251,000 borrowers with tracker mortgages have been directly exposed to the ECB rate hikes. A mortgage holder with an outstanding balance of €200,000 will see his or her interest cost increased by €3,500 over 12 months. A quarter of those on variable mortgage rates will likely see an increase in their interest cost in the month ahead. Households whose mortgages were sold to vulture funds this year, which the Minister is well aware of, are seeing their interest rates being hiked, suddenly and sharply, as high as 7.5%. Some of them are paying over €6,000 and €7,000 more per annum. Many others are paying between €4,000 or €5,000. They have no option to fix. They have no option to switch. They are effectively trapped. The Government has not brought forward-----
The Deputy's time is up.
This is my last point.
No, Deputy. I am sorry, but your time is up.
The Government has not brought forward a single solution for these individuals. Does the Government plan to do so?
Please, Deputy Doherty, your time is up.
I acknowledge the work of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, of which the Deputy is a member, in examining this issue and engaging with those who have direct knowledge and experience of this very important issue. I am directly engaging with the Central Bank of Ireland on this. I know the Deputy met with Central Bank officials yesterday. They are working proactively with the non-bank sector. Later this week, they will publish some additional data. It is important we get a comprehensive assessment of the overall data on the non-bank sector. As the Deputy knows, overall, there are about 716,000 principal private residence mortgages in the Irish system, of which - according to the data the Central Bank will publish this week - about 115,000 accounts are-----
The Minister's time is up.
We have the data on that but let us deal with individuals. A person contacted me about mortgages sold to Pepper that have increased by €520. Another person's mortgage increased by €560. If that is multiplied over a year, it amounts to thousands more euro they have to pay. They were sold a lie. They were told they would be no worse off if their loans were sold to a vulture. They cannot fix. They cannot switch. They are now paying thousands more euro than they would with Permanent TSB. There are others who had a shock in terms of what they were paying before because of the increase in interest rates. These increases in interest rates are happening because of inflation, which is primarily driven by the war in Ukraine. The Government has not brought forward one single proposal to help these individuals. The Government needs to do something. The Central Bank is doing a piece of work in terms of the consumer protection code because it recognises there is a role for us. As a Minister, Deputy McGrath needs to step in-----
The Deputy's time is up.
I thank the Deputy. For many customers who are with the non-bank sector at the moment, there is a way back in terms of switching. Many of those customers are fully repaying their mortgages. Those are no longer non-performing loans and those customers should be in a position to switch their loans back to a main retail lender. Many of the loans were sold because they were in distress. Others were sold because the lender left the Irish market. The main retail banks in Ireland should be actively welcoming back those customers whose mortgage loans are no longer in distress.
The Deputy is correct, however, that there are people paying interest rates of 6% or 7%. In some cases, that is because there is a split mortgage with a high interest rate attached to the active part while no interest rate may be currently applying to the warehoused element. That is why it is important we get all of the data. I receive the same emails as the Deputy. They are helpful to know what is happening on the ground. I am engaging directly with the Central Bank on the issue. My officials are engaging with the wider sector to identify the nature of the issues here and what we can do to help.
59. Deputy Matt Shanahan asked the Minister for Finance the plans of his Department with regard to new taxation policies to stem the exodus of private landlords from the private rental sector; and if he will make a statement on the matter. [11590/23]
My question asks the Minister if his Department is considering any new taxation policies to stem the exodus of private landlords from the private rental sector.
I thank the Deputy. The Government is acutely aware of the difficulties in the housing market. As I have said on many occasions, the key problem is a lack of supply. This is why the Government is committed to increasing the supply of all types of homes, including social, affordable, rental and owner-occupier.
The Minister for Housing, Local Government and Heritage has primary responsibility for housing policy. As part of the Housing for All action plan update published last November, I understand that his Department will undertake a review of the private rental sector. I expect the review will take into account the significant regulatory changes over recent years and will ensure that our housing system provides an efficient, affordable, safe and secure framework for both landlords and tenants.
The exiting of small landlords from the private rental sector is a consequence of multiple factors. A changing regulatory environment which has been necessary to ensure a fair and effective residential rental sector that balances tenants' rights and landlords' responsibilities has resulted in a challenging compliance framework for some. The recent rise in house prices has also prompted some landlords to sell their rental properties. Fears of legitimate access to their properties without encumbrance arising from future policy decisions have been cited by others.
The changing interest rate environment also has a direct impact on many landlords and the decisions they are making. In the cases of landlords subject to income tax, rental income is part of the total taxable income of the landlord. Individual landlords may be subject to income tax at their marginal rate of tax, in addition to which USC and PRSI will also apply.
A range of tax-based measures is already in place to support private landlords. These measures include 100% mortgage interest relief, the new retrofitting allowance introduced in Finance Act 2022 and a number of other deductible expenses. For example, owners of rental properties are entitled to claim deductions of up to €10,000 against rental income from that premises for various expenses incurred prior to it being first let after a six-month period of non-occupancy.
I want to declare an interest in this issue, which is that I own a very modest rental property in Waterford. As the Minister knows, the private rental sector is in a state of chassis. Small private landlords are leaving the sector in droves. The fact is that every investment decision that is made is based on a range of push and pull factors. In the private rental market at present, there are many push factors to encourage people to get out and none to pull people back into the sector.
We must compare the treatment of private landlords with that of institutional investors. Closed companies, for instance, pay almost 70% taxation on their rental income whereas, as the Minister knows well, foreign parent companies with subsidiaries here can reduce their tax liability to almost zero. That is a major problem. It means we are only getting institutional investment partners in when most tenants would be better off with private landlords, who are far easier to deal with than any institutional investors. One of the reasons there are still properties in Dublin that have not been let by institutional investors is the benign taxation policy they enjoy. They can afford to keep apartments unrented to keep a floor under their value.
I thank the Deputy. The truth is there are many reasons individual landlords decide to leave the market. The numbers are clear and the trend and pattern is unequivocal. Many are making the choice to get out of the market at this time. The Deputy raised the question of tax, which is one element of the issue but there are also other elements. Property values have increased significantly so many landlords who were in negative equity are now out of it and are taking the opportunity to exit. The buy-to-let interest rates have also increased. For many, that makes it more difficult for becoming a landlord to be a viable proposition.
The issues around taxation in the rental sector, as has always been the case, will be examined in the context of the budget. That work is getting under way and will conclude in the autumn, when the budget is presented.
I thank the Minister. He has signalled the matter will be considered in the budget but he needs to do some kind of novel review of taxation strategies. This is a significant problem. The people getting out of the sector are older and younger people do not have the ability to replace them. They certainly do not have the ability to come in with 30% or 40% of equity to buy a buy-to-let property. Young people do not have the ability to save that type of money. The market is now favouring institutional investors. As I said, closed companies in this country can end up paying up to 70% in taxation on their rental income. That is not sustainable. Those companies have money and could be invited into the sector. Perhaps personal retirement savings accounts, PRSAs, need to have an ability to bring capital assets into the pension funds. They are not allowed to do that at the moment. They are precluded from doing so and are only able to buy investment properties and equities. Perhaps it is time to look again at some of the sectional reliefs that were in place many years ago to try to give a substantial tax write-off for investment in rental properties.
I have previously made the point in the House that we need to be careful in using taxation policy in the context of the property market. There is a time and place for such interventions and there are measures that are appropriate if they are designed properly. However, it is worth making the point that taxation is paid on the profit. A significant number of reliefs are already available. I have mentioned the 100% mortgage interest relief. A range of deductible expenses are allowed for landlords, including the cost of maintenance; repairs; insurance; management of the property; property management fees; the cost of registering a tenancy with the Residential Tenancies Board, RTB; the cost of letting, such as letting agency fees; and the cost to the landlord of any goods provided or services rendered to a tenant. In addition, there are a range of wear-and-tear allowances in respect of furniture, fixtures, fittings and so on at a rate of 12.5% per annum over a period of eight years. I am committing to a review of all of this in the context of the budget with a view to bringing forward some measures for the rental sector.
60. Deputy Pearse Doherty asked the Minister for Finance if he is satisfied that the insurance sector is providing insurance pricing that reflects the fall in the number and value of claims since the introduction of the personal injuries guidelines; and if he will make a statement on the matter. [11518/23]
The new personal injury guidelines came into effect in April 2021 and the reforms were introduced to reduce the price for consumers, not to generate the savings and boost the profits of the insurance industry. There is growing frustration that the benefits of these reforms are being captured by the insurance industry and the companies, rather than being passed on to consumers and businesses. Is the Minister of State satisfied that the current pricing by insurance companies reflects the reforms that have taken effect in recent years?
I thank the Deputy for the question. As he correctly said, the personal injuries guidelines were adopted in April 2021. They represent a central plank of the Government’s insurance reform agenda. Recent data from the Personal Injuries Assessment Board, PIAB, indicate that the overall average award has fallen by 38% compared with awards made in 2020 under the book of quantum. Given the pace of reform, and the many other measures being implemented, it is necessary for the insurance industry to pass on benefits to its hard-pressed customers. As the Minister of State with special responsibility for insurance, I am currently involved in an intensive round of meetings with CEOs of insurance companies and am pressing this specific point with them.
It is important to note that the impact of reforms can take time to transmit to price levels for a variety of reasons. These can include uncertainty arising from ongoing legal challenges, as the Deputy will be aware; the inherent complexity of the insurance sector’s operating environment; or even dynamic, external developments which can determine price or supply in a small market such as Ireland. Notwithstanding these, what I can confirm is that domestic policy action has been clearly targeted at delivering real and sustainable change benefiting policyholders. In that regard, I welcome recent consumer price index, CPI, data from the Central Statistics Office showing that the price of motor insurance in January 2023 was 9.1% lower than in January 2022, 16.1% lower than April 2021, when the guidelines were implemented, and 43.7% lower than its peak in July 2016.
This is particularly notable as the same CPI data showed that the general rate of annual inflation was 7.8% in January. I know the Deputy has had difficulty with Central Statistics Office statistics in the past, including the last time we discussed this matter, so it is important to say that the fourth national claims information database, NCID, private motor report gave some initial insight into the impact of the guidelines on awards, which was broadly in line with the data released by PIAB. There is read-across there. The NCID continues to be enhanced and will provide more frequent information on premium levels from this year onwards, further enabling us to monitor the impact of reforms.
It is two years on. I remember the Minister of State's party leader, Deputy Varadkar, saying that he would give the insurance companies six months or else. We now hear the Government saying the same thing about the energy companies. The Minister of State with responsibility in this area is now basically giving the pitch the insurance industry gave immediately after the reforms, which is that this is going to take a long period to implement. It is two years on. Awards have fallen by 38%. The number of cases going through the High Court has fallen by two thirds. According to the national claims information database report for 2021, which looked at 2.1 million premiums, insurance premiums dropped by 2%. The evidence we can see from the Alliance for Insurance Reform information and the anecdotal information we are getting is that prices are going back up again. The companies themselves told us that, if we were not seeing premiums reduce by 20%, we needed to ask serious questions. I have been asking these questions. We have proposed legislation that would enforce transparency on the insurance companies and make them show that they are passing on these reductions.
I reiterate the statistics I have mentioned. The price of motor insurance has fallen 9.1% in a year while inflation has been rising. I know the Deputy does not accept that and that he does not accept the CSO data but those are the data available and those are the statistics we have. I have seen it in my own insurance premium and in those of my constituents. These are the figures. They are 43% lower. However, the Deputy is quite right to highlight the current inflationary environment and the difficulties being experienced. Although premiums have fallen at a time of rising inflation, we have inflation in the price of labour and materials. I worry these increases will have material impacts on premiums. We have to monitor that very closely and take every step we can to ensure that inflation is reduced in every possible way and by every metric. This feeds into everything and it is very important to highlight it. I do not agree that the Deputy's Private Member's Bill would provide additional transparency. It fails to take into account the essential role of the national claims information database and the work it does.
The Minister of State would not agree because it is very clear from what she is saying that she is going to take very little action. Two years on, claims and awards have fallen dramatically. Does the Minister of State know what has gone up? It is the profits of the insurance industry. The industry combined made €176 million in 2021, which is a 13% increase and the highest figure in a decade. That is what is happening. The industry is laughing because the Government is not going to take any action. Across the water, when awards fell, the Government made sure that the insurance companies were not pocketing the benefit but passing it on to consumers. Motorists, businesses, community groups and sporting organisations are being fleeced. There has been no reduction there whatsoever. We need the Government to act. I have legislation. I am happy to work with the Minister of State to amend it but it requires transparency. It requires the insurance companies to show, through audited evidence, that they have passed on the benefits of the reforms passed in this House. When awards are reducing, we expect the benefits to be passed on to consumers rather than to be pocketed by the industry.
I agree with the Deputy in that regard but I will go back to my point about the Private Member's Bill. In essence, it duplicates the national claims information database.
No, it does not.
I am afraid it does. The NCID has been enhanced to collect additional data following the introduction of the personal injury guidelines. The fourth private motor report, published in November 2022, shows some initial data on the guidelines up to the end of 2021. This will be developed in future reports. As Minister of State with special responsibility for insurance, I have engaged with PIAB to see how things are going and to work out any process issues it is facing, if any. This is a very practical implementation of an action plan on insurance reform that has whole-of-government support, has delivered very meaningful change in the insurance landscape, has reduced premiums and has brought about a better stickiness of awards at PIAB. We have to stick with it and see it through all the way.
It benefits the insurance industry.
61. Deputy Richard O'Donoghue asked the Minister for Finance the plans, if any, he has regarding the issue of affordability of cars for young families who are dependent on the second-hand car market for transport to schools, third level institutions and work (details supplied). [10765/23]
What plans, if any, does the Minister have with regard to the issue of the affordability of cars for young families who are dependent on the second-hand car market for transport to schools, third level institutions and work? The latest figures from the Central Statistics Office, CSO, show that 2.2 million licensed cars, 64% of vehicles in the country, are six years old or older.
At the outset, the Deputy should note that neither the Government nor the Minister for Finance has a role in dictating the list price of vehicles, which are decided by car manufacturers or car dealerships. My colleague, the Minister for Transport, has overall policy responsibility for transport policy including managing the national vehicle and driver file, which is a database containing details of all 2.5 million registered vehicles and their owners as well as the 2.6 million licensed drivers in the country. The role of the Department of Finance, on the other hand, is limited to the taxation of vehicles through vehicle registration tax, VRT, motor tax, VAT and benefit-in-kind provisions.
Regarding taxation, VRT is an emissions-based tax and therefore the amount of VRT incurred will vary across different vehicle makes and models. The charge is determined by the open market selling price of the vehicle. While there were no changes to VRT as part of budget 2023, recent reform to the rates structure has provided for increased VRT rates for high-emission vehicles while lower-emission vehicles continue to incur low rates of VRT. This reflects the environmental rationale of the tax and underpins Government commitments to decarbonise road transport. It is important to note that VRT is a tax chargeable on the first registration of vehicles in the State and so is not chargeable on second-hand cars sourced here.
The EU VAT directive requires that VAT on motor vehicles should be charged at the standard rate, which is 23% in Ireland. While the standard rate can be as low as 15%, it should be noted that any decrease would have to be applied to all services and supplies that come within this category and that every 1% reduction in that rate would cost the Exchequer €575 million.
For cars that are being imported into the State, VRT and VAT are also chargeable. This includes vehicles that are imported into the State from the UK. From the date it left the EU Single Market and customs union in January 2021, the movement of goods from Great Britain into the EU is considered an importation from a third country and, in accordance with the terms of the withdrawal agreement, such goods must be declared to Customs and Excise and are liable to customs duty, if applicable, and VAT on import.
That speaks to my exact point. Any vehicle that comes in from the UK is subject to VRT and other taxes. Let us look at electric vehicles. The Minister has said that he is not responsible for taxation on second-hand vehicles but he is. If you go to any garage in the UK, you will see four-year-old electric vehicles. There are loads of them in the UK that cannot be sold. Why is that? It is because, after four years, an electric vehicle is no longer under warranty. It also costs €8,000 to replace the battery in an electric vehicle. What has been done? All the vehicles coming in from the UK are diesel or petrol-powered and they come in at an inflated price. People cannot buy second-hand electric vehicles because there is no warranty after four years and it is too expensive to replace the battery. On the other hand, a petrol or diesel-powered car that has done 100,000 km is worth money. An electric vehicle with 100,000 km on it is worth €8,000 less than what you pay for it because the battery cannot be replaced. The Minister is responsible for the tax, the VRT, on second-hand vehicles coming into the country. It should be remembered that 64% of vehicles in this country are six years old or older.
I absolutely accept that the Government and I are responsible for taxation policy in respect of motor vehicles. While the second-hand market for electric vehicles is in the relatively early stages of development, it is happening and we are seeing more and more second-hand electric vehicles available in the market and being bought. That is why it is so important that we continue with the range of supports we have for new electric vehicles because they will become the second-hand vehicles made available on the market. I do not need to go through all of the different incentives and supports available because the Deputy is familiar with them. We do have a role to play in the development of a second-hand market. The Department of Transport has convened a working group on an electric vehicle policy pathway. Meeting the 2030 targets will be a real challenge. It will require us supporting and facilitating more people purchasing second-hand electric vehicles, which depends on such vehicles being available in the first place.
I will go back to my point again. If you buy an electric vehicle at the moment, you are buying at a loss because you cannot change it.
The Government's decision not to proceed with a ban on fossil fuel car sales from 2030 has been criticised by the Irish Electric Vehicle Owners Association. I wonder why that would be. I could not believe the Government was even more zealous than the EU, which stated it could not bring in the ban in 2030 but had to wait until 2035 due to a breach of competition rules. The Government, however, decided to force the sale of fossil fuel vehicles to stop in 2030. The EU has told the Government it cannot do so until 2035 because of competition rules, yet it is forcing the ban down the throats of people here who can only barely afford to keep the cars they have on the road.
There is no escaping the fact that we have to undergo this transition to using more environmentally-friendly vehicles. It is not easy. We recognise the costs involved in the purchase of electric vehicles. That is why we have a range of supports in place. The technology is getting better all the time. Battery life is improving, as is the range of electric vehicles.
The transport sector will have to play its part in reducing emissions. Unfortunately, that means everyone in society must work towards this transition. We recognise that the Government has a leading role to play through taxation policy to try to nudge behaviour in a certain direction. This is dependent on the availability of stock in supply chains. We will play our part to make sure there is an adequate supply in Ireland to help people make the transition which I know most of them want to make.
62. Deputy Pearse Doherty asked the Minister for Finance the number of victims of, and the value of money stolen through, authorised push payment fraud in each of the years 2016 to 2022; the actions his Department will take to tackle authorised push payment fraud; and if he will make a statement on the matter. [11519/23]
In relation to push payments, financial fraud and scams are on the rise. According to FraudSMART, the fraud awareness initiative led by Banking and Payments Federation Ireland, fraudsters stole nearly €45 million through frauds and scams in the second half of 2021, an increase of 50% compared with the previous year. Citizens are increasingly aware and frightened of the techniques fraudsters are using. These have become sophisticated with time, including through authorised push payment fraud. What steps are the Government and Department taking to tackle this growing crime?
I thank the Deputy for raising this issue. I am informed by the Central Bank that it does not collect this granularity of data in relation to the total number of victims of authorised push payment fraud or the compensation paid by payment service providers and payment institutions to victims of authorised push payment fraud.
The provisional crime statistics for 2022, released by An Garda Síochána, note that technology based fraud, including phishing, account takeover, card not present, online shopping fraud, which increased significantly during the Covid-19 pandemic, particularly in 2021, reduced during 2022. However, the Banking and Payments Federation has supplied data on the number of transactions affected by authorised payment fraud and the total value of those transactions from 2019 to 2021, noting that this information is not available for the years prior to 2019.
In 2019, there were 1,646 transactions with a gross loss of €10.3 million. In 2020, there was a significant rise associated with the Covid-19 pandemic with 2,947 transactions and a gross loss of €15.6 million. The trend continued in 2021, which saw 3,967 transactions and a gross loss of €16.8 million.
While the payment service directive, PSD2, set out the industry requirements concerning liabilities for unauthorised payment transactions and the applicable security requirements to help protect consumers against fraud, there is no requirement for payment services providers to compensate customers where authorised push payment fraud occurs. The Deputy will appreciate the actions they have taken to tackle the issue of payment fraud.
This matter is especially timely considering the upcoming review of the PSD2, which is being undertaken by the European Commission. The review is expected to cover a wide variety of areas related to the directive, including payment fraud.
As we know, authorised push payment fraud occurs when a fraudster tricks somebody into making a payment to a bank account that the fraudster controls. An individual could see a holiday on a website and purchase it for thousands of euro only to find out that he or she has been the victim of a scam or an individual may enter a dating relationship through an online dating app and transfer money to help someone with a medical cost only to discover that he or she has been the victim of a romance scam.
Authorised push payment, APP, fraud is on the rise, as the Minister mentioned. We have seen the figures increase by 35% in 2021, with €16.8 million stolen from nearly 4,000 victims. That is double what the figure was two years previously.
Under the payment service directive, payment service providers are required to compensate victims for unauthorised payments but there is no requirement to compensate victims for APP fraud. Protections are stronger in Britain. The regulator is replacing a voluntary code with a mandatory requirement on payment providers to compensate the victims of this fraud. Will the Minister clarify if moving forward with such a requirement here would be possible under the payment service directive?
The Deputy has submitted parliamentary question on this issue recently. As PSD2 is a maximum harmonisation directive, member states may not maintain or introduce provisions through the European Union payment services regulations other than those laid down in the directive, including the introduction of provisions to require reimbursement from payment service providers to victims of authorised push payment fraud. I have raised this issue with my officials. I am advised that the introduction of domestic legislation requiring reimbursement from payment service providers to victims of authorised push payment fraud could lead to unintended consequences and introduce impediments into the payment system causing roadblocks for ordinary users. While preventing fraud is a priority, it is important that any action taken to solve the issue must be considered within the wider European context.
As the Deputy will be aware, the European Commission is undertaking a review of PSD2, which is expected to cover a wide variety of areas relating to the directive and is likely to result in a new legislative proposal, the third payment service directive, PSD3.
We need to address APP fraud and start with protecting victims and putting more pressure on banks and payment providers to improve their systems. Requiring compensation to victims would do both.
I have been in contact with an individual who was a victim of APP fraud. Payments were made through a bank in Britain and a bank in this State, and while she was compensated by the British bank, she received no compensation from the Irish bank. It was the same scam but it involved two different banks in two different jurisdictions. One provided compensation, while the other did not.
Another initiative that could be implemented is confirmation of payee. This requires payment providers to check the payee name entered by the sender against the name on the account to which the payee is sending funds. This requirement is in place in Britain and also the Netherlands. It has been an effective tool in reducing incidents of fraud and should be introduced here without delay. I understand such a proposal is made in the Commission's legislative proposal on instant payments published in October. There is no reason we cannot move forward in implementing this system without delay. Would the Minister consider that?
The advice received from my officials at this point is that the best way of addressing this issue is through the review the European Commission is undertaking of PSD2, which it is expected will result in a new legislative proposal to bring forward PSD3.
The Deputy has raised a valid point. I acknowledge that there is a gap here for the people who are directly affected. It is not provided for currently within PSD2. I will continue to work with my officials to find a way of ensuring that people who are affected by APP fraud can be protected and I will work with the Deputy on that.
