Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)

I thank Deputy Pearse Doherty for introducing this Bill and highlighting the scourge of moneylenders. A recent report claimed that one in 10 consumers has had to resort to moneylenders. This is concerning in light of the exorbitant interest rates some people are forced to pay. It has been claimed that people are being charged annual percentage rates of up to 287%. There are 47 licensed moneylenders in Ireland at present. The high number of unregistered moneylenders is most concerning. Mr. Brendan Dempsey of the Society of St. Vincent de Paul has said that such operators have mushroomed in recent years.

Despite the reality that the registered and unregistered branches of this industry are thriving, nobody has been prosecuted for illegal moneylending in the last seven years. I consider the penalties that are imposed on those who offer illegal moneylending services to be insufficient. A person who is found guilty of illegal moneylending in the District Court faces a maximum fine of €3,000, a maximum prison sentence of 12 months, or both. A person who is found guilty of illegal moneylending in the High Court faces a maximum fine of up to €100,000 or a maximum prison sentence of up to five years. Given the level of APR that is levied by these companies, these fines do not represent an adequate deterrent.

People must be encouraged to come forward and report illegal moneylenders. Awareness campaigns conveying the dangers of engaging the services of moneylenders must be rolled out, especially at Christmas time when such companies target the vulnerable. People are not just borrowing for a one-off life events such as christenings, communions and confirmations. As a former school principal, I ask school managers to introduce a policy of allowing robes to be rented to communion and confirmation classes. That would reduce the costs involved. A survey that was conducted this year by the Irish League of Credit Unions found that 40% of people borrowed money to pay bills in the last 12 months. Some 10% of the borrowers in question went to moneylenders to obtain loans, thereby entering a cruel and vicious cycle that can be almost impossible to beat. There is no doubt that action must be taken this regard.

Ireland is not unique in terms of the rise of moneylenders and associated problems. Short-term loans and pay-day loans becoming prevalent in the UK. In 2009, it was estimated that credit amounting to £1.2 billion was provided by way of payday loans in that country. There is no limit on the amount of interest that may be charged on pay-day loans in the UK. In 2011, the Financial Times noted that pay-day lenders had been attracted by Britain's relatively unchecked market. The volume of such business has increased to approximately £2 billion in the last four years. We do not want people who are in dire straits to get involved in pay-day loans.

I thank the Minister for the opportunity to participate in this debate. I acknowledge all of these issues, but I do not believe the Bill before the House provides an answer. It does not address the complexity of the issues. Moneylenders will not survive if they cannot charge rates above 40% APR. They will be pushed into the unregistered and unregulated market. I commend Deputy Pearse Doherty on bringing the Bill before the House. I am unable to support it, unfortunately, because I do not think 40% is a realistic figure.

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