Personal contract plans, PCPs, are a type of hire-purchase financing agreement used for the purchase of motor vehicles. They normally comprise three parts: an up-front deposit payment, ongoing monthly payments and a final payment at the end of the contract term. While the consumer will have the hire and use of the car, ownership of it remains with the finance provider. Hire-purchase providers are not required to seek authorisation from the Central Bank for the provision of hire-purchase agreements such as PCPs. The consumer protection code of 2012 is a binding statutory code on entities regulated by the Central Bank. As the category of hire-purchase provider is not authorised or regulated by the bank, however, the Central Bank advises that they are not subject, for the provision of a hire-purchase agreement, to the requirements of the code. There is, however, legislation governing the operation of hire-purchase agreements, and this is provided for in the Consumer Credit Act. Any entity providing hire-purchase agreements, or acting as intermediary in regard to such agreements, will have to comply with the relevant provisions of that Act. Both the Central Bank and the Competition and Consumer Protection Commission have certain functions under that Act. The bank has an overall role in relation to the operation of such agreements and the commission has a role in regard to the authorisation of credit intermediaries.
Nevertheless, it is important to keep this new and growing area of consumer finance under review. I welcome the publication of the recent report and the separate Central Bank economic letter on the market. These papers provide an important insight into the market. There are already important legislative provisions in place. Nonetheless, I am now examining the recent publications and will give careful consideration to what further actions, including consumer protection measures, would be appropriate in the light of the reports.