Fergal Browne (Fine Gael)

I welcome the Minister. He does not sound his best today; perhaps he reflects the state of banking in this country and the lack of public confidence in the system.

I regret this issue is coming before the House today when, perhaps, debate is still ongoing in the Dáil. My colleague, Deputy Richard Bruton, has put forward amendments on the Central Bank and Financial Services Authority of Ireland Bill, but I am not in a position to say whether they were accepted. The timing on this could have been better organised. It does not help that the Minister had to tear across here from the Dáil for this debate nor that the report will not be out until mid-June. This debate tries, in a way, to pre-empt the report. While the debate concerns the general banking system, all of us will of course refer to the AIB controversy because it is fresh in our minds.

We cannot blame the public for its cynicism on this issue. We know that if any of us owe money to the bank, it is not long before we get a reminder. In the past, prior to the time when interest rates rose so high in the 1980s, people were encouraged to borrow heavily. However, when matters started to go wrong, the banks were very quick to call in loans and repossess property and farms. This is still fresh in people's memories.

The Minister admitted that the overcharging in AIB was going on for eight years, an astonishing length of time. He mentioned in his speech a proposed penalty of €5 million. Those who pick up the tab for the €5 million will not be the offenders but the bank's customers, because the money will come from general banking charges. How can we put forward sanctions that will hit the offenders and not be passed on to the ordinary customer?

The Minister hopes the Central Bank inquiry will ascertain approximately two thirds of the customers who are owed money. What plans has he got to ensure the remaining third will receive compensation or that no bogus applications are made for compensation? It is a sorry mess. The overcharging took place over a period eight years and I imagine some people genuinely entitled to claim compensation have forgotten about their transactions.

While AIB said it was unaware of the overcharging, a claim was made in The Irish Times last Saturday that in 1998 the Director of Consumer Affairs had asked the bank to ensure it was not overcharging for these services, but the bank failed to confirm whether it was overcharging. This implies a breakdown in the system. When asked to clarify whether it was overcharging, the bank did not even reply to the Director of Consumer Affairs. It is not right that consumers should be treated with contempt by the banks who give the impression that they are untouchable. It was only because of media hounding that AIB came clean on this issue. It said at first that it had lodged €14 million with the Central Bank to cover reimbursement, but that has now been increased to a stunning €25 million. It is quite possible this could increase further.

Many questions must be asked of the banking institutions and the Government. Why is an internal inquiry taking place and why is the Garda not involved? Why do we ask an institution to investigate itself? Has the Minister full confidence in that system? Should not an outside agency such as the Garda be brought in to investigate the overcharging? Why have the Taoiseach or Tánaiste not apologised for allowing a situation develop where the integrity of the banking system was again denigrated? Why must the consumer take the pain while those meting it out get away scot free? What will it take for the Government to give consumers the voice they deserve and which employers and workers currently enjoy?

AIB customers would probably not have faced such overcharging had IFSRA been up and running prior to 1 May 2003. Unfortunately, internal rows between the Minister for Finance and the Tánaiste led to the delay. Currently, the Government has no power to seriously punish AIB for its misdeeds. One would wonder what view the board of directors of AIB and other institutions which have been caught out in the past hold on that. There are no sanctions.

In the past few months my colleague in Carlow-Kilkenny, Deputy Hogan, has highlighted the rip-off culture, of which the charging of 1% instead of 0.5% commission is a prime example. We have consistently called for the following measures: regular price surveys to be conducted to highlight good value and name and shame those charging excessive prices; a price league website with prices on all major products to be created; codes of conduct to be developed for service providers and retailers on issues such as passing on exchange rate movements; a good practice provider quality mark to be devised and promoted for suppliers of goods and services who agree to be bound by relevant codes of practice; the local authority to be worked with to drive a pro-consumer agenda at local level involving regular price surveys and measures that protect consumers' interests against local cartels; fines to be imposed for non-display of price lists in banks, petrol stations, pubs, hairdressers and so on — the fine of €127 should be increased to a maximum of €3,000 to put pressure on people to give full information to consumers; and consumers to be represented in national partnership agreements. It is clear that recent agreements have been dominated by the producer with little thought given to consumers.

It is important that workers in the banking system, who are doing their job and are unfortunately being tainted by a minority within the banking sector, have their good name restored. People must have confidence in the banking sector, which must not be above the law. It is important that we impose real sanctions, not token gestures. It is also important that the sanctions hit offenders, not consumers who are already being hit.