Fiona O'Malley (Independent)
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The Minister of State is welcome to the House.

Marc MacSharry (Fianna Fail)
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I welcome the Minister of State, Deputy Haughey. I am glad he has taken the time to hear this motion. As he is no doubt aware, as the nation has had to contemplate the introduction of painful measures that affect all households, there have been an inordinate number of financial pressures on families such as coping with mortgages repayments and increased bills. The difficulty of getting credit to cover these bills has caused great distress for families and, in many instances and not least in my area of Sligo, has given rise the spectre of illegal moneylending, about which I am unhappy. Having researched the position through a group I established, the prevention of family home repossessions group, and having been further informed by a community group in Sligo called Communities Against Illegal Moneylending, the members of which comprise representatives of the Garda Síochána, RAPID, elected members, members of the regeneration project at Cranmore, the money advice and budgeting service, MABS, the credit union, various community groups, social services and other community representatives, we learned from that group's research and mine that the fear of violence and the difficulties faced by families as a result of illegal moneylending are palpable in the extreme. This issue requires urgent attention.

The Minister of State will no doubt be aware that there have been few convictions for this crime nationwide. I would say the number is under six. There is a good reason for this. The criminal nature of illegal moneylending is to force people to repay exorbitant interest rates of 200%, 300%, 400% and more under the threat of violence and criminal damage to one's property, oneself and others. I am not confident the Garda has the appropriate powers to deal decisively with this issue. People are afraid to come forward because of the threat of violence.

I ask most respectfully that due consideration be given to the introduction of adequate legislative reform, especially of section 11 of the Non-Fatal Offences Against the Person Act which deals with the threat of harm or intimidation of a person for the non-payment of a debt. Although that law is in place, a conviction is difficult to achieve because people are reluctant to come forward and co-operate with gardaí because the threat of harm and violence is too much for them to bear. I suggest we examine the introduction of additional measures in this area and not rule out draconian measures similar to those that had to be implemented to deal with the IRA and criminal organisations whereby the sworn testimony of a superintendent or a chief superintendent would be enough to convict people engaged in illegal moneylending.

It is a disgraceful and worsening situation that is not getting the kind of national coverage required. While I appreciate there is a considerable body of law in place to deal with this issue, the enforcement of this law is very difficult owing to the natural fears people have about coming forward.

I ask that additional measures be introduced to support groups such as Communities Against Illegal Moneylending in Sligo. Similar groups should be formed elsewhere and unite to promote and encourage people to come forward and co-operate with the Garda in this regard. At a minimum the Department of Justice and Law Reform should make a modest fund available to promote measures and provide support to people who have suffered the impact of this crime and wish to come forward to report it to the Garda. Such support mechanisms are not in place. There needs to be education about this area and people should be told about the State and the laws that are in place. They should be encouraged to come forward by being offered protection against these criminals.

There is wholesale illegal moneylending activity throughout the country. It has come to my attention that a moneylender in one town is lending alleged criminals bail money when they go to court. If the bail money is, say, €100 or €200, the moneylender will tell the person on leaving court that they now owe him €600.

Apart from those persons, it is the families who are genuinely struggling with the difficult measures that have had to be implemented recently and who cannot get credit who are being forced to turn to illegal moneylenders. We need to take decisive action to wipe out this activity. It is not getting to the surface. We need to do more. Section 11 of the Non-Fatal Offences Against the Person Act could be amended to give a chief superintendent in a divisional area the power to get convictions on his sworn testimony. Garda sources tell me they know who is involved in this activity in the various communities but they cannot get convictions because people are afraid to come forward. There is an onus on us as legislators to take the appropriate action to deal with this issue.

While this is not specifically the Minister of State's area, we need also to focus on a maximum lending rate. Legally one can charge an interest rate of 187% in this country, and that in itself is criminal. While this is not relevant specifically to this matter, it is another area that might be examined.

Two issues need to be addressed. New legislation is required to give the Garda adequate powers to deal with this activity, and support mechanisms need to be put in place to help those who want to come forward. The people concerned must be given the protection they require.

Seán Haughey (Dublin North Central, Fianna Fail)
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I am taking this Adjournment matter on behalf of the Minister for Justice and Law Reform. I thank the Senator for raising this issue which is clearly one of concern to him and, I am sure, all other Members of the House.

Responsibility for legislation on the regulation of moneylending and the prohibition of illegal moneylending lies with the Ministers for Finance and Enterprise, Trade and Innovation. Comprehensive legislation targeting the illegal lending of money has been on the Statute Book for some time, and has 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 it for prescribed contraventions of legislation or regulatory rules.

The focus of this debate is illegal moneylending which is addressed by section 98 of the Consumer Credit Act 1995 which 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 and search that person - if need be, by force - and remove from him or her any documents or money which the member reasonably believes may be in his or her possession for the purpose of moneylending. It is an offence to obstruct or interfere with a member of the Garda in using such powers. It is also an offence to give a garda false or misleading information or fail to comply with a request made by a garda in using these powers. The primary offence of engaging in unlicensed moneylending is indictable. It is noteworthy that legislation introduced by the Department of Enterprise, Trade and Innovation, the Investment Funds, Companies And Miscellaneous Provisions Act 2005, increased the penalty for this offence to a fine not exceeding €100,000, imprisonment for a term not exceeding five years, or both.

The Minister shares the Senator's concern for those who, because of financial and other pressures, fall victim to unscrupulous individuals who prey on their fellow citizens. The House will agree that the powers granted to the Garda to address the problem and the penalties available to the Judiciary in this regard are considerable. The Garda achieves its greatest successes when it enjoys the support and assistance of the community. If people have information on the activities of illegal moneylenders in their communities, the Minister urges them to let the Garda know in order that it can investigate and prosecute these criminals. As citizens, it is incumbent on all of us to play our part in combating crime. The Minister thinks it is important that we reflect on the positive steps which those who are under financial pressure can be advised to take to avoid falling into the traps of money lenders. The Money Advice and Budgeting Service is doing excellent work to advise individuals and families under pressure on how best they can manage their debts. It can advise people on how to reach accommodations with credit institutions and avail of the exceptional needs assistance available from community welfare officers.

I thank the Senator for raising this matter and making a number of suggestions, particularly in relation to the need for new legislation. I will bring his proposals to the attention of the Minister.

Marc MacSharry (Fianna Fail)
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I hope the Minister of State will be able to reflect what I have said. The problem of illegal moneylending is much bigger than we realise. While I appreciate some of my suggestions may be somewhat draconian, the time has come to use powers such as those we used to deal with subversive activity. We cannot allow this practice to continue to affect innocent families that are struggling in these difficult economic times.