Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

I would like, at the outset, to express my appreciation to Senator MacSharry for publishing the Criminal Justice (Unlicensed Money-Lending) Bill 2013. The Senator has, through this Bill, put on the agenda once more the important issue of illegal moneylending.

Responsibility for legislation on the regulation of moneylending and the prohibition of illegal moneylending lies with the Ministers for Finance and Jobs, Enterprise and Innovation, respectively. Comprehensive legislation targeting the illegal lending of money has been on the Statute Book for some time and has, indeed, been strengthened in recent years. Licensed moneylenders operate under the regulatory control of the Financial Regulator, who can impose "administrative sanctions" against moneylenders licensed by him for prescribed contraventions of legislation or regulatory rules.

The focus of today's debate is illegal moneylending, which is addressed by section 98 of the Consumer Credit Act 1995. This prohibits any person from engaging in the business of moneylending without a licence. Acting as an agent of an unlicensed moneylender is also prohibited.

A member of the Garda Síochána has considerable powers under the Act where he or she has reasonable cause to suspect that a person is engaging in the business of unlicensed moneylending. The member may, without warrant, stop, question, search - if need be by force - and remove from that person any document or money which the member reasonably believes may be in that person's possession for the purpose of moneylending. It is an offence to obstruct or interfere with a member of the Garda Síochána using those powers. It is also an offence to give a garda information which is false or misleading or to fail to comply with any request made by a garda using those powers.

The primary offence of engaging in unlicensed moneylending is indictable and it is noteworthy that legislation brought forward by the then Department of Enterprise, Trade and Innovation, namely, the Investment Funds, Companies and Miscellaneous Provisions Act 2005, increased the penalties for the offence to a fine not exceeding €100,000, imprisonment for a term not exceeding five years or both. In addition, the offence of demanding money with menaces under section 17 of the Criminal Justice (Public Order) Act 1994 already carries a penalty of up to 14 years imprisonment.

As the Minister for Justice and Equality, I share the Senator's concern for persons who fall victim to those unscrupulous individuals who would prey on their fellow citizens through illegal moneylending. I think the House will agree, however, that the powers granted to the Garda to address the problem, and, indeed, the penalties available to the Judiciary in this regard, are considerable. In that regard, the provisions of this Bill would not in fact create any new power or penalty. The Bill effectively replicates offences which are already on the Statute Book.

The provision in section 2 of the Bill, which proposes making an offence of "extortion, demanding money with menaces and unlicensed money-lending", replicates and merges the separate offences already contained in the Criminal Justice (Public Order) Act 1994 and the Consumer Credit Act 1995. The Criminal Justice (Public Order) Act 1994, section 17, provides for the offence of blackmail, extortion and demanding money with menaces. This section already provides that it is an offence for any person who, with a view to gain for himself, herself or others or with intent to cause loss to another, makes any unwarranted demand with menaces. The Consumer Credit Act 1995, section 98, provides for the prohibition on engaging in business of moneylending without a licence, as previously mentioned. This section already provides that a person shall not engage in the business of moneylending on his or her own behalf unless the person is the holder of a moneylender's licence and maintains a business premises for that purpose.

However, whereas the existing legislation provides clarity in dealing separately with these two very separate and distinct offences, the proposed Bill would, in my view, create confusion by effectively merging these two separate offences. Furthermore, the penalties proposed in the Bill are equivalent to the existing penalties already imposed for the relevant offence under the 1994 Act. This already carries a penalty of up to 14 years on indictment, the penalty that Senator MacSharry made reference to in his Bill.

In addition, the law already provides in the Criminal Justice Act 2007, section 26, that a court may make a monitoring and protection order to protect a victim of an offence from harassment by the offender. This provision can be made by a court in regard to the offence of demanding money with menaces, as defined by section 17 of the 1994 Act. A court may also make an order protecting a person from harassment under section 10 of the Non-Fatal Offences Against the Person Act 1997, even where the court finds that the alleged offender is not guilty of an offence. This is identical to the provision in section 2(5) of the Bill.

For these reasons, the Bill would not provide our courts and An Garda Síochána with any power they do not already have under existing legislation. The Bill would therefore have no legal effect other than to make the law less effective and more obscure by blurring the distinction between the separate offences of illegal moneylending and demanding money with menaces. This would, in my view, not be appropriate.

I think we are all aware as public representatives of the damage that illegal moneylenders can cause in people's lives. Typically, they prey on the most vulnerable and disadvantaged people in our communities and charge extortionate interest rates for money lent. Rates in excess of 100% are by no means unusual. Prosecuting people for the offence is very difficult - that I acknowledge - because the loans are informal and undocumented and the vulnerable victims often live in terror of the moneylender, so they are typically extremely reluctant to make formal complaint about the offender. I have been advised by the Garda authorities that, where offences under section 98 are disclosed and are reported to An Garda Síochána, the matter will be the subject of investigation under the direction of the local district officer, with relevant expert assistance available from the Garda Bureau of Fraud Investigation. I would encourage those who have information concerning the operation of unlicensed moneylenders to make that information available to An Garda Síochána, which will take all measures open to it to enforce the law in this area.

However, we must remain aware of the considerable reluctance of victims to provide evidence against offenders to whom they owe money. Prosecutions for illegal moneylending are very infrequent. There is one case pertaining to illegal moneylending activities - offences under the Consumer Credit Act 1995 - currently before the courts.

Due to the infrequency of prosecutions, I believe that, in tackling the problem, legislation and enforcement can go only so far.

In addressing the issue, the greatest success comes when the support and assistance of the community is brought to bear to ensure persons in vulnerable positions are well advised about steering clear of illegal moneylending. That is why I believe that community-based initiatives such as the Money Advice & Budgeting Service, popularly known as MABS, are crucial in ensuring that people who are under financial pressure can be advised to take the appropriate steps to avoid falling into the moneylender's trap. MABS also advises people on how to reach accommodations with credit institutions and how to avail of the exceptional needs assistance available from community welfare officers. In concert with MABS, other services such as credit unions, community development projects, family support centres, social services and Government-funded voluntary organisations such as the Society of St. Vincent de Paul play an important role in providing appropriate advice and guidance to vulnerable people. Additionally, and shortly to come into force, there will be the help available under the Personal Insolvency Act of 2012 to facilitate those in substantial financial difficulty to enter into appropriate settlements. That is a far preferable route to dealing with creditors than borrowing money from illegal moneylenders.

As he mentioned it, Senator MacSharry will be aware of the efforts of the Communities Against Illegal Lending of Money, CAILM, initiative in his own constituency. This is an inter-agency approach funded by the Government, involving the local community, the Money Advice & Budgeting Service, the credit union movement, Focus Ireland, the local Garda and social services in diverting people away from illegal moneylending. I commend the work that organisation does and join the praise voiced by Senator MacSharry in his contribution.

We all share the concern for persons who fall victim to those unscrupulous individuals who prey on their fellow citizens through illegal moneylending. I believe the House will agree, however, that the powers granted to the Garda to address the problem and the penalties available to the Judiciary in this area are considerable. Unfortunately, this Bill would not provide our courts or An Garda Síochána with any powers they do not already have under existing legislation. The Bill would have no legal effect, therefore, other than to make the law less effective and more obscure by blurring the distinction between two separate offences, namely, illegal moneylending and demanding money with menaces, which would be an undesirable outcome. However, I appreciate and share the genuine concern Senator MacSharry voiced about the extent to which moneylenders exploit the most vulnerable and I welcome the opportunity to address this very important issue in this House. I urge people not to fall prey to illegal moneylenders and, if they find themselves in financial difficulties, to use the other mechanisms available to them to which I referred. Each of us should encourage organisations in our individual constituencies to publicise that message. In most constituencies throughout the country there are voluntary groups and individuals, branches of MABS and others who are engaged in this very important work.

I point out to Senator MacSharry that it is not my inclination, having been on the receiving end for too many years, automatically to vote down a Private Members' Bill. Rather I am anxious to encourage people to work on such Bills because often there are areas of importance that, in Government, one has difficulty in prioritising, given other demands. I can tell the House I have no difficulty with this, as a Minister. If a Bill is produced in an area that truly requires legislation and if the Government has not had an opportunity to address it, I will not, as Minister, automatically say we should oppose that legislation. That is the wrong approach. I believe we should encourage people, whether in this or the other House, to act as legislators and make a contribution. For the reasons given, however, I must oppose the particular provisions of the Bill before us, but I welcome that the House has an opportunity to discuss this important issue which can have such a detrimental impact on the lives of very many vulnerable people.