I am advised that the majority of hire purchase agreements, such as PCPs, are provided to consumers through credit intermediaries. Under the Consumer Credit Act 1995, credit intermediaries are authorised by the Competition and Consumer Protection Commission (CCPC) and the CCPC advises that, when performing intermediary functions, credit intermediaries are required to disclose certain information in writing to the consumer including that the intermediary receives a commission, payment or consideration of any kind from an undertaking for arranging any such financial accommodation.
While intermediaries are frequently involved in the process, hire purchase agreements are ultimately provided by hire purchase providers and these providers are the entity which is the “owner” of the good let to the consumer under the hire purchase agreement. While hire-purchase providers themselves are not required to obtain authorisation from the Central Bank (or the CCPC) for the provision of hire-purchase agreements, nevertheless this is an activity which is subject to statutory control and which contains important consumer protections. For example, Parts II and VI of the Consumer Credit Act (both of which fall within Central Bank designated provisions of the Act) provide that important information be disclosed in advertisements for hire purchase agreements and also in the agreements as entered into by consumers. This includes information on the cash price of the good, as well as the APR and hire purchase price. My officials have checked with both the CCPC and the Central Bank and neither entity has seen any evidence of the practices in the UK as referred to in the question operating in Ireland. Also the Bank has indicated that no specific issue in relation to the provision of hire purchase agreements or their associated commission arrangements arose during the consultation process on Intermediary Inducements (CP 116).
As the Deputy will be aware, more generally I asked Mr. Michael Tutty to conduct a review of the PCP market and regulatory structure and his report was published by my Department last November. That report found that there was currently no evidence of consumer detriment arising from PCPs but nevertheless it set out a number of recommendations to help avoid possible problems arising in the future. I have previously indicated that I broadly accept the recommendations and conclusions of the Tutty report. Nevertheless, in line with some of the report’s recommendations my Department is currently consulting the Office of the Attorney General on some specific issues raised in the report, and when a response is to hand my Department will further engage with the Central Bank, the Department of Business, Enterprise and Innovation and the CCPC on this matter.