Pearse Doherty (Donegal, Sinn Fein)
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299. To ask the Minister for Finance if he will review the practice of car dealers receiving commission from motor finance lenders; the current legal framework regarding such commissions; and if he will make a statement on the matter. [3145/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Motor finance provided through Hire Purchase including Personal Contract Plans (or 'PCPs') became a fully regulated activity in Ireland in May 2022 when the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022 came into force and made the activities of consumer hire and hire purchase a fully regulated activity by the Central Bank.

The Consumer Protection Code General Principles and Chapters relating to suitability and advertising only were applied to regulated firms engaged in these activities from August 2022. The Central Bank is currently undertaking a review of the Consumer Protection Code. Its intention is that all relevant sections of the new Consumer Protection Code will apply to these expanded credit activities.

Discretionary commission arrangements link the commission received by the credit intermediary to the interest paid by the consumer. The credit intermediary is allowed to set the interest rate and the commission earned is the difference between the base rate set by the product producer/lender and the interest rate set by the credit intermediary on the motor finance arrangement.

Following engagement with the sector and a review in 2024, the Central Bank of Ireland instructed regulated firms who were applying Discretionary Commission Arrangements to motor finance hire purchase arrangements to cease the practice from 31 July 2024. All relevant motor finance providers in Ireland have now ended this practice.

The Central Bank has advised that it decided to cease this practice in advance of the relevant sections of the new Consumer Protection Code coming into force, on a go forward basis, since 31 July 2024. The Central Bank concluded from the review undertaken that the practice was not consistent with market outcomes that the Consumer Protection Code is seeking to achieve.

If a consumer has any concerns or questions in relation to their motor finance product taken out in the past, on this or any other matter, they can contact the regulated firm that sold the product. The consumer protection framework provides that any consumer who is not satisfied with how a regulated firm is dealing with them in the course of providing a service can make a complaint directly to the regulated firm. If a consumer is not satisfied with how their complaint is dealt with by a regulated entity, they can then make a complaint to the Financial Services and Pensions Ombudsman (FSPO).