Róisín Shortall (Dublin North West, Social Democrats) | Oireachtas source

I draw attention to the fact that yet again Government speakers have failed to show. There was insistence that an extra slot be provided before the Social Democrats slot and we have another occasion when nobody has showed up. Perhaps the roster needs to be reviewed.

The Social Democrats are very happy to support the legislation. Our only criticism is that it is coming so late and has taken so long. We have known about this for many years. Many agencies and advocacy groups have drawn attention to the fact that the law in the area of protecting consumers in respect of indirect credit and personal contract plans has been very weak. Many recommendations have been made over the years to address this issue and it is only now we are getting around to doing so. It is welcome nonetheless.

Indirect credit is a growing issue. The prospect of being able to purchase something, and it can be anything from a pair of trousers to a fridge freezer, with what seems like a painless way of repaying the cost is very enticing for people, yet it ends up not been painless in terms of the type of interest rates charged and the fact people are not given sufficient time or advice to consider the wisdom of proceeding with such a purchase. Many people end up bitterly regretting having done this and there is not much protection for them.

We are seeing this increasingly from all types of stores, particularly with regard to online purchases. Harvey Norman, which sells all kinds of furniture, and other outlets such as DID Electrical and Compu b, have the same credit company, Humm, providing finance to them. It is incredible that we would have an entity providing such an enormous range and quantum of credit, and we can only imagine the scale of the sales of these three major companies, and that one credit company is not regulated by the Central Bank. It makes no sense whatsoever.

The promotion of this type of indirect credit is particularly enticing to people on low incomes who are not in a position to buy things outright. They might be taken in by the heavy marketing of products to be brought under this type of credit. Very often, it is those on the lowest incomes who end up having products that are repossessed or who are pursued, often relentlessly, by these credit companies. This is completely unacceptable. It is not before time that these indirect credit companies are brought under the remit of the Central Bank.

The other area covered by the legislation is personal contract plans. This is an area that has absolutely exploded in recent years. It has exploded in the context of the general public being very poorly informed about how PCPs operate. At the point when people are considering buying a car and the type of credit terms on which they buy it, PCPs seem very attractive but we know from surveys that a significant number of consumers do not understand the manner in which the PCP system operates. Very often, after making substantial repayments over the period of the agreement and taking care of the vehicle, they are shocked to discover the price they must pay to take ownership of the vehicle. It is not a good deal for people in the main. What is key is that people are so ill-informed about what is entailed. The PCP market is now worth close to €2 billion. It is absolutely enormous. I was interested to read a study done a few years ago by the Competition and Consumer Protection Commission.

It was done in conjunction with the Economic and Social Research Institute, ESRI, and it involved asking people to make decisions on PCP offers based on the available market advice. It was clear a very substantial number of people would not make sound financial decisions in that regard. The study also drew attention to the absence of clear, independent advice for consumers.

I very much support this Bill. It brings hire purchase finance and PCPs under the remit of the Central Bank. It requires providers of buy now, pay later credit to become entities regulated by the Central Bank. As part of the consumer protection code, this regulation will have to apply to people who avail of that kind of credit, particularly in regard to the suitability of the products for consumers and the ability of consumers to repay the loan. That is important. The Social Democrats support the legislation.

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