I am not au fait with this section. It has been suggested section 36 may restrict the right to sell a loan book to refinance activities and that this may not be a desirable position. Has the Minister heard that argument and assessed it?
SECTION 36.
Question proposed: "That section 36 stand part of the Bill."
I heard it. I did not consider that a consumer would be so prejudiced by the Bill that it would not allow him or her to sell such a loan book. I am satisfied with the arrangements in the Bill. As county councillors, many of us know of cases where people secure house loans and their upward social mobility enable them to buy other houses. Other house purchasers then buy their loans and take them over from the county council. I considered that matter and the case made but I was not persuaded it should be covered in the Bill.
What do the words "including set-off" mean?
I understand that setoff is the difference in price between that at which the person sells a house and buys on.
On Deputy Bruton's point, recently the Cambridge Group's loan book was purchased by another institution and individual creditors could frustrate the positive step to resolve the matter. Was a condition that the agreement continue in its original form and that individuals would not have the right to a third party appeal?
In this section we were faithful to the words in the directive.
An individual can frustrate the conditions of the agreement.
That would obscure the interests of a body of consumers.
Providing the conditions are not changed there is no reason it could not be sold.
Maybe that is provided for in that the consumer can plead against the original creditor.
The same argument was put to me as was put to Deputy Bruton and I considered it. Similar provisions have worked well. I do not know of cases where it has not worked. Many European countries implemented these directives and I have not heard of matters arising in this area.
We will risk it.
Question put and agreed to.
NEW SECTION.
I move amendment No. 119:
In page 28, before section 38, to insert the following new section:
38. —(1) The existence of a credit agreement shall not in any way affect the rights of the consumer under the Act of 1980 against the supplier of goods or services purchased by means of such an agreement in cases where the goods or services are not supplied or are otherwise not in conformity with the contract for their supply.
(2) Where—
(a) in order to buy goods or obtain services, a consumer enters into a credit agreement with a person other than the supplier of them,
(b) the creditor and the supplier of the goods or services have a pre-existing agreement whereunder credit is made available exclusively by that creditor to customers of that supplier for the acquisition of goods or services from the supplier,
(c) the consumer referred to in paragraph (a) obtains his credit pursuant to that pre-existing agreement,
(d) the goods or services covered by the credit agreement are not supplied, or are supplied only in part, or are not in conformity with the contract for the supply of them, and
(e) the consumer has pursued his remedies against the supplier but has failed to obtain the satisfaction to which he is entitled,
the consumer shall have the right to take proceedings against the creditor.
(3) This section does not apply to housing loans.".
The amendment seeks to insert a new section and proposes to redraft sections 38 and 39 into one section. Section 38 becomes subsection (1) of the proposed new section. Based on paragraph 1 of Article 11 of the 1987 directive, it is designed to ensure that the rights which a consumer enjoys under contract law in Ireland under the Sale of Goods and Supply of Serivces Act are not diminished because the goods or services are purchased on credit rather than for cash. The proposed subsection (2) gives effect to Article 2 of the directive and provides the consumer with the right of action in certain circumstances against the provider of credit and the supplier of goods and services.
Amendment No. 299 is linked to it. It was originally intended to repeal section 14 of the Sale of Goods and Supply of Services Act. I now propose that this section which deals with the liability of finance houses stands, thereby providing the consumer with the dual protection of section 14 and section 38 of the Consumer Credit Bill. It seems ambiguous that in some cases, as in the directive on misleading advertising, we are removing something but this section gives added protection.
The original section 39 now being replaced provided that a creditor was deemed to be a party to the sale of goods and the creditor and the supplier would be liable jointly and severally regardless of whether the goods were supplied.
Deputy Bruton mentioned section 39, I presume he meant section 38.
Section 39 is being replaced.
We are now dealing with amendment No. 119 which is replacing section 38.
I would like to clarify something. Deputy Bruton mentioned section 39. Does he mean section 38?
Are we not debating section 39 now?
We are coming to that. We are also replacing section 38 with amendment No. 119.
I appreciate that. Amendment No. 119 provides for the replacement of the existing two sections 38 and 39. My point is that the creditor and the supplier would be jointly and severally liable for the quality of the goods and service. Is that liability now being reduced? Does the consumer still have the option of pursuing the creditors in regard to the quality of the goods?
I propose that this section which deals with the liability of the finance houses stands, thereby providing the consumer with the dual protection of section 14 of the Sale of Goods and Supply of Services Act, and section 38 of the Consumer Credit Act.
Is this a new provision? Do the credit institutions know that they are liable jointly and severally?
This was the subject of much heated debate between us at several meetings. I saw their point of view, but this is a consumer credit Bill. On that basis they have been so informed and I am told they are happy with it.
Is it the case that if a company that puts in aluminium windows goes out of business any defects in the windows will be the responsibility of the finance house? Will the finance houses bond themselves in some way to deal with such a situation?
The relevant section 14 of the Sale of Goods and Services Act, 1980, would be illustrative and states:
Where goods are sold to a buyer dealing as consumer and in relation to the sale an agreement is entered into by the buyer with another person acting in the course of a business (in this section referred to as a finance house) for the repayment to the finance house of money paid by the finance house to the seller in respect of the price of the goods, the finance house shall be deemed to be a party to the sale and the finance house and the seller shall, jointly and severally, be answerable to the buyer for breach of the contract of sale and for any misrepresentations made by the seller with respect to the goods.
That still stands and there is also protection under the Consumer Credit Act.
We now know that the finance house will have to satisfy itself that the people it is dealing with are reputable.
I often thought the legislation was very loose, although that provision in the Sale of Goods and Supply of Services Act is very strong.
One still has to pay the credit house, even if the goods are defective.
That is a new provision.
That is so, and we are keeping the old provision so that, in effect, there is a good parcel of securities for the consumer.
Amendment agreed to.
Sections 38 and 39 deleted.