Seán Sherlock (Cork East, Labour)
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144. To ask the Minister for Finance if his attention has been drawn to the rapid increase in personal contract plan, PCP, credit instruments in the motor industry; if his Department has assessed the default risk of such instruments; and if banks, financial institutions and other financial subsidiaries such as car manufacturers themselves have been sufficiently regulated by the Central Bank to lend to car buyers in the market. [37757/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Personal Contract Plans (PCP) are a form of Hire Purchase and both the Central Bank and the Competition and Consumer Protection Commission (CCPC) have certain functions and legal powers in relation to the provision of hire-purchase agreements.

Hire-purchase providers are not required to seek authorisation from the Central Bank or the CCPC for the provision of hire-purchase agreements.  In turn, hire-purchase providers are not subject (for the provision of a hire purchase agreement) to the requirements of the Consumer Protection Code 2012, which sets out requirements regarding the sales process, including suitability and affordability requirements and requirements regarding complaints handling.

The majority of consumer hire purchase agreements are provided through ‘credit intermediaries’.

The CCPC is responsible under the Consumer Credit Act 1995, for the authorisation of credit intermediaries, some of whom may sell PCPs to consumers on behalf of a finance company. A "credit intermediary" is defined as "a person...who in the course of his business arranges or offers to arrange for a consumer the provision of credit or the letting of goods in return for a commission, payment or consideration of any kind from the provider of the credit or the owner, as the case may be". 

The CCPC issues licenses to credit intermediaries and keeps an online list of credit intermediaries holding a valid authorisation which is available on the CCPC website www.ccpc.ie.The CCPC deals with complaints about the advertising of Credit Agreements and the advertising of car finance on credit intermediary websites and in the media. It also has a specific statutory remit to provide personal finance information and education to consumers. 

The CCPC has conducted research into the car market and car finance sectors, and has conducted numerous public awareness campaigns on the issue of car finance in recent years. It’s most recent campaign, which ran in June/July 2017, focused on car finance and was specifically aimed at providing information to consumers on issues in relation to PCPs, such as the fact that the consumer does not become the legal owner of the car until they make the final payment.

On 17 July the CCPC announced that it had commenced a study of the PCP car finance market. I have been informed that the CCPC’s study is examining the experiences of consumers and assessing the information provided to them at the point-of-sale. The study will also analyse consumers’ understanding of PCPs, the structure of the product, the options available to consumers at the end of the agreement, and the protections available to PCP consumers under the existing legislative framework. I await the outcome of the study.

The Deputy may also wish to note that if a consumer has concerns regarding the activities of credit intermediaries, they may wish to contact the CCPC. The Financial Services Ombudsman can also investigate complaints from individual consumers about credit intermediaries.