I move amendment No. 136:
In page 31, subsection (3), line 6, after "Director" to insert ", a consumer or a person acting on the consumer's behalf".
The purpose of this amendment is to extend the right to challenge excessive charges for credit to the consumer or a person acting on the consumer's behalf. As the Bill stands, the only person who can take an action to deal with excessive rates of charge for credit is the Director of Consumer Affairs and even then, he can only take that action in the High Court. This is not a practicable avenue of redress for the typical consumer who feels that he is being excessively charged. He would first have to convince the Director of Consumer Affairs of his case and then persuade the Director to incur the substantial costs of a High Court action.
Most transactions which a consumer would deal with would be of a size which would not make it practicable for the Director of Consumer Affairs to go to the High Court to pursue cases of excessive charge. The Director would only use this in exemplary cases if he was trying to make a point.
It is reasonable to give the consumer, as well as the Director, the right to challenge under this section. This has been sought by the Consumers' Association of Ireland and by many groups which act on behalf of low income families. Many of these groups, which provide an advice network to low income families, would be in a position to take up the challenge on behalf of the consumer. If my amendment is accepted, people would act on behalf of low income families and they would be willing to challenge moneylenders or others engaged in credit, who are charging excessive amounts. That would be the practical effect of my amendment. One would not need to wait until the Director of Consumer Affairs, who has one office in Dublin for the entire country, is alerted to the many problems which consumers are facing in this area. One would also achieve the establishment of a practical network to defend consumers' interests in the area of credit.
An associated amendment, which we will discuss later, seeks to move consideration of the matter from the High Court to the District Court. Many networks trying to assist low income families would not be in a position to go to the High Court to challenge such moneylending charges. It would be more reasonable and practical to take such actions in the District Court.
The idea behind section 46 is an excellent one. For the first time, we are providing the opportunity to make a challenge against excessive charges on behalf of the consumer. If we leave this matter to the Office of the Director of Consumer Affairs and do not extend it to the consumer or someone acting on his behalf, we will miss the boat on an important opportunity.
I am not happy with the Minister's decision to remove the 39 per cent ceiling which we used to have in the old Moneylenders Act, 1933. Section 17 of the Moneylenders Act, 1933, states:
If it is found that the interest charged exceeds the rate of thirty-nine per cent. per annum, or the corresponding rate in respect of any other period, the Court shall conclusively assume for the purposes of section 1 of the Moneylenders Act, 1900, that the interest charged is excessive and that the transaction is harsh and unconscionable.
It would then be struck down. The Minister argued that such a provision was unnecessary or ineffective because the 39 per cent became the ceiling. However, if the Minister read the Combat Poverty Agency review or any other reviews on the activities of moneylenders, she would see that the typical charges were multiples of 39 per cent and that, in some cases, up to 1000 per cent was charged on moneylending agreements. There is no evidence that the 39 per cent was honoured as a ceiling. The evidence is that higher charges were being made.
The advantage of having a ceiling — it should be a variable ceiling and not a figure which remains the same for all time because interest rates rise and fall — set by ministerial order would be that the consumers would not have to go to court frequently to establish the case because there would be a legal ceiling and it would only be cases below that which would require a consumer to challenge it in the District Court. Other cases would be unlawful and would be automatically struck out. In many cases it would save the cost of litigation which would otherwise cause the Director, consumers or someone acting on their behalf to take a case to the courts.
I hope the Minister accepts this provision. It seems to have widespread acceptance among the groups which have written to us. No group has argued that this redress should not be available to the consumer. There seems to be a broad consensus and I expect it has the support of the Members.