Joan Collins (Dublin South Central, People Before Profit Alliance)
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I thank the Leas-Cheann Comhairle. This issue came to our attention on Monday when a number of people called to our office to say the doors of Rents & Co., a bill payment company, were closed on Monday morning. There was a certain anxiety among people in regard to the money they had given the company to pay their bills.

Subsequently, customers received a letter dated 31 January from the company advising that the bill payment system was closed, that the Central Bank had frozen its account, that it was no longer able to provide for further collection or deposits, that it would notify customers' creditors on their behalf and that it was currently updating its computer system. What it did not say was whether customers' money would be refunded in full. That is a huge concern for people.

This is a very unfortunate victim of the recession. Many people in the area depended on the company to pay their bills, as they are cut to the bone in terms of paying mortgages, utility bills, insurance and so on.

This is a limited company but we do not know if it is in receivership or insolvent. It seems the money has been frozen under the new Central Bank regulations. I was under the impression that only institutions, such as credit unions and banks, which lend money were covered by the new regulations. This company does not lend and does not appear to have invested in property using money on deposit.

In whatever way this company is dealt with, we must ensure people are paid first. A young lad with a young family put €7,000 in just before Christmas to pay the mortgage, insurance and many other bills which were coming up. Already a number of people have had their UPC connection cut off because the cheques bounced. The company wrote them in good faith but the money was then frozen.

It appears that such companies are not bonded. We should look at limited companies and at what people are signing up to, in particular companies looking for money up-front, for example, the private for profit waste companies asking people to pay up-front. These companies should be bonded to secure that money if they go into liquidation or close. This seems to be happening much more. I would like to hear the Minister's ideas on that.

Michael Noonan (Limerick City, Fine Gael)
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I thank Deputy Collins for raising this important issue. As I indicated in the Dáil in reply to parliamentary questions, I am advised by the Central Bank that, following the failure of Home Payments Ltd. last summer, the bank inspected the bill payment and debt management sector to assess whether firms providing these services are carrying out any activity that falls to be regulated by the Central Bank and whether consumer funds may be at risk. Following identification of a dozen companies providing these services, the first phase of the Central Bank's review has concluded with the bank writing to a number of companies notifying them that their activities are subject to regulation by the Central Bank and requiring that immediate steps be taken to provide additional protection for client funds. The bank has advised me again today that this process is continuing.

The companies that are subject to regulation by the Central Bank need to determine whether they wish to apply for authorisation from the Central Bank or, alternatively, whether they wish to change their business model. In the meantime, the Central Bank is requiring that certain controls be put in place in regard to client assets which are overseen by an independent third party. The House will appreciate that this is being done in the public interest. While the Central Bank is independent in the performance of its functions, I agree with the action it is taking.

Depending on the exact business model undertaken by a firm, it may or may not be subject to regulation by the Central Bank. I wish to inform the House that debt management firms which process payments on behalf of clients are subject to regulation under the EU Payment Services Directive. The Payment Services Directive was transposed into domestic legislation in September 2009 and came into effect in November 2009. Any firm which provides payment services, as defined by the legislation, requires an authorisation to trade from the Central Bank. Again, the Central Bank has advised me that it is currently pursuing the issue with the sector and, in the interim, is advising clients of the risks involved in dealing with unauthorised firms. I fully agree with the Central Bank's action in that regard. The Central Bank is also advising those clients of other options available to them, such as joining their local credit union which will, generally speaking, provide bill payment services.

The Deputy will be aware of the press statement from the Central Bank on 24 January last in regard to bill payment and debt management firms. In the statement, the bank advised customers to be aware that the bill payment and debt management companies they have engaged may not be regulated by the Central Bank. Where customers provide funds to an unregulated company for onward payment to a creditor, the handling of this money will not be subject to segregation and safeguarding rules. The bank also advised customers to check directly with their creditors, for example, utilities providers, mortgage providers, credit card companies etc., without delay.

In regard to the company mentioned specifically by the Deputy, I am advised by the Central Bank that the company is based in Crumlin Cross in Dublin. Under the powers granted to it under the payment services regulation, the bank has informed me that it has intervened, again in the public interest, and has frozen the accounts of the firm. I have been informed that the Central Bank is currently engaged with the company and has been informed that the company has written to its client base to inform them that it is closing and that it will provide further information to them in due course. Pending the finalisation of the Central Bank's engagement with the company and its report to me, I do not wish to make further comment in this House. It would not be prudent to do so in the absence of the relevant information.

On the basis of the experience with a number of debt management companies since last summer and on advice received from my officials I have agreed that all debt management and debt advice firms should be subject to regulation by the Central Bank. This is an important public issue at a time which certain members of the public are straining to meet all their liabilities. The public must have confidence in the provision of these debt management and debt advice services and there must be a proper and robust system of regulation in place. To that end, I have instructed my officials to prepare the necessary legislation which, subject to Government approval, will be brought forward as a Committee Stage amendment to the Central Bank (Supervision and Enforcement) Bill 2011. Committee Stage of the Bill, which has already passed Second Stage, will be taken in the near future and Deputies will have the opportunity to put forward their views.

Joan Collins (Dublin South Central, People Before Profit Alliance)
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I thank the Minister for his reply, which covers a lot of points, but he is not saying that there is any guarantee for those involved with this company that their moneys will be refunded to them in some way through the Central Bank, or that they will be paid first. That is a huge concern for the people involved. I know the Minister is saying that he cannot comment further prior to the finalisation of the report, but people would like to hear that they will get priority and will receive their money first. In future it will be important that companies have a bonding system to protect customers in such cases.

Michael Noonan (Limerick City, Fine Gael)
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I again thank the Deputy for raising this matter. The Central Bank has moved in and frozen the company's accounts, and the company has gone out of business. The bank is assessing the position now to see what assets are available in the frozen accounts. I will communicate the Deputy's concerns to the Central Bank and will stress that she sees it as an absolute necessity that customers of the company get priority in the disbursement of funds available.