John Curran (Dublin Mid West, Fianna Fail)
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Question 151: To ask the Minister for Finance if he will introduce regulations to prevent credit card companies from issuing unsolicited cheques to be used as loans incurring very high interest charges and charges commence immediately from when the loan cheque is cashed. [27186/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The financial regulator is responsible for monitoring the provision of financial services to consumers. In providing consumer protection, the financial regulator can impose and enforce rules on financial services firms regarding how they deal with consumers, including how they sell financial products.

The financial regulator has informed my Department that the financial regulator is only aware of one credit card provider that issues cheques drawing on individuals' credit card accounts. The credit card provider in question has advised the financial regulator that some customers have found this facility an effective means of making a payment where credit card facilities are not available for transferring a balance from another credit card or making a payment by post.

The cheques in question are treated as a cash advance and as such may incur the higher rate of interest normally associated with cash transactions on credit cards. The interest is applied from the date that the cheque is presented for payment. This information is included in the letter accompanying the credit card cheques. The credit card provider has also informed the financial regulator that credit card cheques are not sent to customers who are over their credit limit or delinquent. The financial regulator is aware that if consumers apply for these types of credit card, the chequebook is a feature of the product.

The financial regulator is continuing to monitor the provision of credit card cheques. My Department has been advised by the financial regulator that only a small number of consumer complaints have been received in relation to the service.

The Deputy may wish to note that the financial regulator's draft consumer protection code has included the following provision "A regulated entity must give customers details of all charges and fees including third party charges which the regulated entity will pass on to the customer, prior to providing a service to the customer." There is also a provision that credit card limits may only be increased following a request from the customer. These issues are being considered in the context of the consultation process on the code.