Tuesday, 27 March 2007
Consumer Protection Bill 2007 [Seanad]: Report and Final Stages
I move amendment No. 2:
In page 14, line 15, after "regulation" to insert "or order".
This is a technical amendment tabled on the advice of the Office of the Parliamentary Counsel. Reference is made throughout the subsection to regulation or order. The second part of line 15 states only that the regulation shall be annulled, whereas that should state "the regulation or order shall be annulled", as proposed by the amendment.
I move amendment No. 8:
In page 47, between lines 17 and 18, to insert the following:
49.—(1) Where it is the practice of a trader to accept payment in respect of a product—
(a) by only one relevant method and to impose a charge on a person for the person's making payment in respect of the product by that method, or
(b) by different relevant methods and to impose on a person the same charge for the person's making payment in respect of the product by any of those methods,
the trader shall ensure that any representation made by the trader, or on the trader's behalf, in relation to the price payable in respect of the product, states clearly that price as a single amount inclusive of the foregoing charge.
(2) For the purposes of subsection (1), it is immaterial that the trader also accepts payment in respect of the product concerned by one or more methods of payment that are not relevant methods of payment and the reference in that subsection to the practice of a trader to accept payment in respect of a product by only one relevant method shall be read accordingly.
(3) A trader who contravenes subsection (1) commits an offence and is liable on summary conviction to the fines and penalties provided in Chapter 4 of Part 5.
(4) In a case falling within paragraph (a) or (b) of subsection (1), nothing in that subsection prevents the inclusion in any representation referred to in that subsection of—
(a) an indication that the single price stated is inclusive of a charge for making payment by the method concerned or, as the case may be, any of the methods concerned, or
(b) an indication of the amount of such charge.
(5) In this section 'relevant method', in relation to payment, has the same meaning as it has in section 48.".
These amendments oblige traders who, notwithstanding the prohibitions in section 48, impose additional charges by reason of the method of payment chosen by customers to pay for goods and services, to ensure that any representation of the price payable for the goods and services states the price as a single amount, inclusive of these charges. Retailers who accept payment by only one of the methods prescribed in section 48 and who impose additional charges for payment by that method will be obliged to include these additional charges in any statement or representation of the price of the goods and services. Retailers who accept payment for goods and services by more than one of the methods prescribed and impose the same additional charge, and who are outside the scope of section 48, will be obliged to include the additional charge in any statement or representation of the price under section 49.
There was considerable debate on this matter on Committee Stage. There is support for the Minister's goal. I have received representations from the Irish Travel Agents Association. The industry is dealing with net margins but is not directly providing the service. Travel agents are paid in a certain format and this will affect turnover, profitability and survival. One travel agent indicated this measure would result in a reduction of €20,000 in gross profit. I am more concerned about the smaller travel agents who have been in touch with us about this matter. Perhaps the Minister of State might read some extracts or bring to the Minister's attention the implications of section 48 of the Bill, as amended, on the ban on credit card surcharges. Normally, I would be strongly supportive of this, but in this particular case I should like if the Minister of State would give some indication as to how we may assist in getting over this problem. The travel industry operates on an average gross margin of 8% and a net margin of 2% or less. The Bill, in effect, will wipe out the net margin on credit card transactions, which are now in excess of 40% of turnover due to increased web usage. It will definitely damage the industry, as indicated to me.
We do not want to discriminate unduly or unfairly on behalf of any particular industry, but there is certainly a case to be met as regards the travel agents in particular. I assume they had no notice of the fact that this would be brought to the attention of the Minister and introduced as an amendment until the Committee Stage amendments were tabled within the past two weeks. We just want to get the Minister of State's view, in the context of implementing section 48, as amended on Committee Stage, as to what way it might impact on this particular sector.
I concur with what Deputy Hogan has said. I, too, have had representations on the very same points. It certainly raises issues about the travel industry and the implications therefor. In the submission to me the point is made that there is the risk of a knock-on effect for consumers. Those who pay by alternative methods other than direct debit may become victims in that regard. I would ask the Minister of State to comment on what Deputy Hogan has said.
As colleagues will be aware, there is no proposed amendment to section 48 at this stage. I am, of course, aware of the points which have been made in particular by the travel agents and their concerns about payment by credit card and the additional costs they may incur arising from section 48. The point has also been made strongly, particular by consumer rights' interests, that across a wide range of areas no such charge is imposed by traders on the high street or elsewhere. There is clearly a downside, as illustrated by the arguments put forward by the Irish Travel Agents Association, ITAA, representatives of which I met earlier today who put forward its case very strongly. However, in general terms there is also considerable advantage in making provision for non-cash payments, in particular. A move has been made towards electronic payment methods for very good reasons, not least issues to do with the safety of cash in transit as well as many other considerations which are all positive. Notwithstanding that, the travel agents have a particular concern and there are other areas where consumers have expressed a great deal of concern about either hidden charges arising from credit card transactions or sometimes fairly transparent additional charges. This last may be seen when payments can only be made by credit card, which is the case with one particular company and that is covered by section 49.
Certainly the view of the Minister and the Department is that on balance, the provisions of section 48, as they stand, are in the best interests of the consumer. While account was not taken, in the manner described by Deputy Hogan, in terms of having a long debate and a good deal of consultation on the issue with the travel agents in particular, the Minister is of the view that the provision, as it stands in the Bill, merits support on balance in that it benefits consumers to a great extent and does not appear to impact in the way that is being argued. There are costs associated with payments by all methods, not just credit cards. The concerns of the travel agents in particular, about credit card payments, have been made strongly, but the Minister is of the view that at this stage section 48 is of such benefit that it ought to be left as it stands.
I understand where the Minister is coming from. He has had the support of all sides of the House on the amendment that was tabled on Committee Stage, in terms of devising a way in which we can eliminate hidden charges and have more transparency in costs associated with transactions. The travel industry, however, as was made clear to me and I am sure to the Minister of State, is not like an airline. It is an intermediary body for the purpose of providing a service for consumers. A good deal of business is now being done on-line, and the travel industry is under pressure because of that. It is the same in the insurance industry. The capacity to move completely to a cashless payments system, however, is still not in place to the extent that it should be, perhaps. Nevertheless, this decision, which perhaps we did not tease out as much as we should on Committee Stage, will have an impact on this particular sector. As it was brought to the attention of the Minister of State, I should have thought we might have found a way to accommodate within the spirit of what the section, as amended, purported to do, the specific nature of the business involved in the travel industry. If there is an opportunity before the Bill finally passes in which this can be achieved, it is worthy of further consideration.
The ITAA has made the point that one of the consequences is that there will be a higher price for everybody. This is the Consumer Protection Bill. From that perspective perhaps there is a consumer aspect to it, particularly in the light of what the travel agents argue. They maintain they will suffer greatly as a consequence and perhaps there is a consumer element within their argument which should be taken on board. The Minister might give this further consideration, if possible.
It is important to be aware that section 48 does not prevent travel agents from recovering the cost of the credit card operation. I accept the important point made by Deputy Upton to the effect that spreading this charge across all payments has an impact on other consumers. This is almost inevitable when one seeks to move towards a cashless society to get away from the difficulties inherent in transactions which are operated entirely by cash or cheque. I have not been able to find a means for counting the cost of cash and cheques. It is not just a cost to business but in many respects is a charge against the State and others. That has not been possible to assess properly, however, in the short time since this issue has been on the agenda. I accept it is a relatively short period since it came on the agenda in mid-February in the Seanad. Nevertheless, everybody who looks at the difficulties involved concedes that there are considerable advantages in general terms from a consumer viewpoint, in the provisions of section 48. People are even more convinced when section 48 is set beside section 49 and the other issues are dealt with which the debate, particularly on Committee Stage, threw up. Having considered all of that and given that generally speaking cash and cheques are among the most expensive methods of payment, it is in our interests to move towards a cashless society.
There are, of course, other issues relating to charges imposed by banks. In this instance, this is a slightly different issue and one that may be addressed in different legislation — and ultimately will have to be tackled, in any event. For the moment, however, it has not been possible to come up with a means to address the potential fallout and problems of concern to the ITAA and its members.
I move amendment No. 9:
In page 54, between lines 12 and 13, to insert the following:
"(5) This section is in addition to section 49 (respecting certain surcharges being stated as part of price).".
I move amendment No. 15:
In page 59, line 4, to delete "the offence" and substitute "an offence".
The past four amendments arise consequentially on the provisions of section 49. This is a technical amendment on the advice of the Office of the Parliamentary Counsel which deemed that the use of the definite article in this context could give rise to confusion, particularly for prosecutors framing charges or counts in summonses or indictments.
I move amendment No. 17:
In page 63, between lines 8 and 9, to insert the following:
74.—Order 53A of the District Court Rules, 1997 (S.I. No. 410 of 2001) is amended—
(a) in Rule 1, by the substitution in the definition of "small claim" of "€10,000" for "€1,269.74",
(b) in Rule 3, by the substitution of "€10.00" for "€9.00", and
(c) in Rule 7, by the substitution of "€10.00" for "€9.00".
This amendment proposes to alter the District Court rules to give more business to the Small Claims Court. It would devolve some of the issues that would arise from consumer protection to a court less onerous in terms of costs. There is a case to be made for increasing the limits for the Small Claims Court to ensure there would be more consumer protection interaction with it in a less expensive environment. I included a figure for purposes of discussion.
This issue was discussed on Committee Stage. The current maximum award in the Small Claims Court is €2,000. The legal costs implementation advisory group has proposed that it be increased to €3,000 and reviewed biannually thereafter. This would meet some of Deputy Hogan's concerns. Regulations increasing the limit, the District Court (Small Claims) (Amendment) Rules 2006, came into effect in early 2006 and will be reviewed in two years. The Minister expects the National Consumer Agency will be included in any consultation by the Courts Service in further reviews of the limit. If it were increased to €10,000, it would be beyond the civil jurisdictional limit of the District Court which is set at €6,250.
That is why I want to amend the District Court rules. I understand the argument of the Minister of State. It is not easy to increase the limits and devolve a system of small claims that would be accessible to people without some expense and time. The principle of establishing a non-adversarial, less expensive mechanism to solve disputes around consumer protection issues is important. I note the increase to €3,000. Does the Department intend to expand the Small Claims Court service to more districts?
The matter is more appropriate to the Minister for Justice, Equality and Law Reform. The advisory group stated the Minister should consider expanding the range of cases dealt with under the small claims procedure. He also has responsibility for the locations where such claims may be heard.
I move amendment No. 20:
In page 69, after line 41, to insert the following:
84.—The Central Bank and Financial Services Authority of Ireland Act 2003 is amended in Article 3 of Part 21 of Schedule 1 by the insertion of the following after section 7:
7A.—(1) The Director may, in the interests of better informing consumers, conduct price surveys in order to—
(a) make consumers aware of price discrepancies,
(b) assess competitiveness or other practices under sections 4 and 5 of the Competition Act 2002, or
(c) for such other reason as the Director may, from time to time, deem necessary.
(2) The Director shall not be limited by national or currency boundaries in carrying out a price survey referred to in subsection (1).
(3) The Director shall be empowered to—
(a) (i) publish or part-publish all or any part of information,
(ii) create an electronic database containing data, gathered by him or her under this section,
(b) make any electronic database created under paragraph (a)(ii) publicly available on-line.
7B.—The Director may compile and publish codes of conduct for service providers and retailers on such issues as he or she may, from time to time, deem appropriate, including the passing on of costs such as exchange rate movements.
7C.—(1) The Director may establish the 'Good Practice Provider Quality Mark'.
(2) The Good Practice Provider Quality Mark shall be awarded to suppliers of goods and services who agree to be bound by a code of practice compiled and published under section 7B.".
This amendment was discussed on Committee Stage. I am glad the Minister of State introduced an amendment then which meets most of this amendment's requirements.
Why are they out of order? There is no difficulty in having miscellaneous sections in legislation, particularly when it concerns competition and consumer matters. When an Opposition Member tables an amendment, proposing the insertion of a new section, it is inevitably deemed to be outside the scope of the legislation.
On my own and the Minister's behalf, I thank the Deputies opposite for their co-operation on all Stages. I thank the Office of the Parliamentary Counsel which gave much advice on the technical aspects of the legislation and the departmental officials involved. All Members believe consumer protection legislation is important and must be advanced. While issues arose, particularly with section 48, I am confident a means will be found to address these concerns.