Mr. Paul Joyce:

As the Deputy is aware, the CCMA was fundamentally reviewed and this process concluded in July 2013. It is now December 2014 and the first proper inspections of lenders in the context of their compliance with what was quite a lender-friendly revision are only beginning to take place. The Central Bank does not appear to publish any statistics on compliance with the CCMA and there is very little consumer research in the context of talking to borrowers who are in arrears regarding their experience under the code. There is a limited amount of information available. We do have some information to the effect that certain of the debt-servicing companies are extremely difficult to communicate with and that they are very hardline in their negotiations and in the context of the kind of arrangements they are offering on behalf of the entities they represent.

To return to the issue of who should be responsible for the debt, we have just heard that the Department of Finance is suggesting that the owner of the agreement should exit stage left - from a legal and regulatory point of view - where a credit servicer has been engaged to service the loan. That seems extraordinary. Section 40 of the Consumer Credit Act, details of which are set out in the submission we made to the committee, and the parallel provision in regulation 30 of the consumer credit regulations specifically state where a borrower's debt is sold on or where the rights relating to that debt are assigned to a third party, then that third party steps into the original creditor's shoes from a legal perspective. The borrower is also entitled to plead against the purchaser of the debt any defence he or she had against the original creditor. The suggestion - if indeed such a suggestion is being made - that a lender who engages a debt-servicing company can abdicate responsibility for honouring the terms and conditions of a loan seems quite absurd. If that is the case then section 40 will have to be removed from the Statute Book.

In the context of what Deputy Pearse Doherty stated earlier, it seems that in terms of access to the Financial Services Ombudsman's scheme, both the creditor - who is still legally responsible for the loan and in whose name the loan remains - and the credit-servicing company should both potentially be the subject of a complaint. Equally, the CCMA should apply to both entities. There have been difficulties in this area in the past. Returning to the issue of hire purchase, garages have tried to claim that loans are with finance companies and that they are not responsible for them. In turn, finance companies have stated that credit intermediaries are responsible for lining up hire purchase agreements and that they are not responsible for what those intermediaries do. One should be able to make a complaint to the Financial Services Ombudsman against both the original creditor, who still has ownership of the loan, and anybody that creditor brings in to service the loan, regardless of whether it is an existing lending company or a lending company with a seat outside the State.