Dáil Éireann - Volume 683 - 20 May, 2009
Central Bank and Financial Services Authority of Ireland (Protection of Debtors) Bill 2009: Second Stage (Resumed).
Question again proposed: “That the Bill be now read a Second Time.”
Deputy Seán Sherlock Deputy Seán Sherlock
Deputy Seán Sherlock: I welcome the publication of this Private Members’ Bill and I congratulate Deputy Flanagan on the work he has done on it. It is worthy of support. Deputy Pat Rabbitte summed up the basis of the Bill last night when he stated that this is a growth industry for the times in which we live. People find themselves indebted for whatever reason and in some cases they are extremely vulnerable, stressed and unable to discharge debts, not because of recklessness on their part but because of the economic circumstances in which they find themselves. Only a small number of debtors plunged themselves knowingly and recklessly into these circumstances. In so far as recklessness is involved, it is not merely on the side of the consumer, but is frequently shared by the lender where moneys are recklessly lent in circumstances where questions might reasonably have been raised about ability to repay. Honest, decent, law abiding citizens find themselves in these circumstances, and one has heard the case being made that they are being subjected to debt collection methods of which the House could not approve.
It is important to speak about the culture surrounding instances where people find themselves subjected to inordinate amounts of debt. It has been stated previously that the level of financial literacy in this country still leaves a lot to be desired. If I look at the socio-economic group that finds itself largely at the mercy of debt collectors, I note they are invariably persons who may not have a degree of financial literacy that would pervade throughout all of the socio-economic strata. In 1997, the OECD conducted an international audit literacy survey. It found  that 25% of Irish adults have difficulties with simple everyday numeracy and literacy tasks, such as adding up a bill, understanding a payslip or filling in a building society form. The National Adult Literacy Association and MABS have done much work in this regard, but it is important that if this Bill is taken on board, we should look at the overall context of people getting themselves into increasing debt. A proportion of those people will find themselves in that situation because they may not have read the fine print.
It should be acknowledged that IFSRA has done much work in making the language of financial services much clearer for people, and the campaign for plain English has achieved much in that respect. However, there are people who are still getting into debt, either through debt collection agencies or debt collectors, and a portion of that is due to an inability to understand the process on which they embarked in the first instance. That must be borne in mind.
When it comes to the issuance of a licence for the purposes of undertaking debt collection, it is important that something is built into the legislation that protects the consumer. The licence holder should be made take cognisance of a certain set of criteria. Although they are not dealt with specifically within the legislation, perhaps they could be dealt with in section 5 and section 6. Where debt is being collected, it should be collected where there is an assignment of wages. This is referred to in the Bill. There must be safeguards to prevent an assignment of wages from adversely affecting the debtor’s ability to maintain a basic standard of living for themselves and their family. In particular, the level of an assignment should not undermine the debtor’s access to the basics such as food, clothing, housing and basic utilities, so there is a social inclusion component built into the Bill in order for people to have their basic rights.
There also needs to be more regulation of the costs of debt collection in order to protect the debtor and his or her family. There are often penalty charges for late payment built into debt, and the interest payments on that alone are significant and sometimes can be a multiple of the original debt. That is something that should be examined.
In welcoming the Bill, we also need to look at whether or not there is a basic EU model. Deputy Rabbitte stated last night that there does not appear to be a regulatory framework for debt collectors across the EU. My research tells me that there is no such framework but I am open to correction on that. We need to have some kind of overarching regulation of debt collection, so that every citizen knows his or her rights and entitlements. There should be an effective right of redress in the Bill for the debtor in respect of harassment, excess debt recovery costs and the wrongful removal of goods. If a regulator is empowered to look at this issue, there should be some framework to give a right of redress to the debtor. If we look at the nature of most unregulated debt, it is very often at the hands of moneylenders. It remains a difficulty as to how we can regulate moneylenders who operate in the black market, but for those who are incorporated and are collecting debt, then harassment issues should allow for a certain right of redress on the part of the debtor where actions are proven to be excessive.
The defaulting consumer should have a statutory right to be advised on who is authorised to collect the debt so that there is complete transparency in the process. It could be argued that the use of multiple debt collection agencies to collect debts simultaneously should be prohibited. We dealt with the Fines Bill last week in the House. We are witnessing a sea change in Government thinking, so that we are trying to keep people out of prison and facilitate them by allowing for payment of fines by instalment. That is to be welcomed. It could be argued that a similar type of facility should exist for people who find themselves in debt; they should not be subjected to the same offences.
Deputy Michael Ahern Deputy Michael Ahern
 Deputy Michael Ahern: I wish to share time with Deputies Cregan, O’Hanlon, Blaney, Fleming and O’Connor.
An Leas-Cheann Comhairle An Leas-Cheann Comhairle
An Leas-Cheann Comhairle: Is that agreed? Agreed.
Deputy Michael Ahern Deputy Michael Ahern
Deputy Michael Ahern: As we all know, the economic climate has changed radically during the past year or so, causing great difficulties for many people in meeting financial obligations. Like other Members, I, too, have received representations from constituents seeking help and assistance in re-organising their finances. The pressure on families who cannot meet their repayments is real and palpable and is causing great anxiety. I believe the Bill proposed by Deputy Charles Flanagan is an attempt to relieve this anxiety and pressure. While it is well meaning, it does not take into account legislation on this issue already on the Statute Book.
The proposal to establish a debt collection regulator is not a wise one and would require extra finance and staffing for the Financial Regulator and Garda Síochána. According to the Bill, everyone, including debt collection agencies, garage owners, the ESB, Bord Gáis, plumbers and carpenters, would, to collect debts, have to obtain a licence, get clearance from the Garda and obtain a tax clearance certificate. This is so over the top as to be unworkable. In addition, Deputy Flanagan’s failure to define in the Bill what constitutes “a debt collector” is sloppy drafting.
The recapitalisation scheme introduced in February 2009 includes a new code of conduct to assuage public concern in regard to action by debt collectors on mortgage arrears. I believe banks and building societies are dealing sympathetically with people encountering difficulties in this area. Concern in regard to strong arm tactics and intimidation of persons owing money has been highlighted in the newspapers and elsewhere. As I stated earlier, Deputy Flanagan’s Bill is an attempt to counteract such behaviour. However, the Deputy has failed to acknowledge that the Non-Fatal Offences Against the Persons Act 1997 deals with issues such as assault, intimidation of the demand of money with menace. Section 11 of that Act provides that it is an offence to make demands for payment of debts under threat. It is clear that collection of debts by threat or harassment is not legal and every person so threatened should report the matter to the Garda Síochana.
I am interested to know if Deputy Flanagan speaks against Fine Gael policy in seeking the establishment of another quango. Any person in debt should contact his or her relevant bank or building society and should not leave such matters on the long finger. He or she should also contact the Money Advice and Budgetary Service, MABS, of the Department of Social and Family Affairs which has and continues to provide a crucial service for people in financial difficulty needing help and advice. It has proved itself to be the best way of achieving a good result for debtor and creditor.
I believe the Bill is considerably lacking. However, I thank Deputy Flanagan for bringing it before the House as it provides Members with an opportunity to set out the laws in this area and to state what agencies are available to assist people in difficulty.
Deputy John Cregan Deputy John Cregan
Deputy John Cregan: I, too, congratulate Deputy Flanagan on bringing forward this Bill which deals with an issue we all have to deal with in our constituencies from time to time. There is tremendous merit in the House discussing this issue at this point in time.
As other speakers have said, many people have been significantly affected by the difficult economic situation in which we find ourselves. People are experiencing great difficulties and the situation may worsen rather than improve in the coming months. The adverse situation, which occurred very quickly, could not have been anticipated by people who undertook financial commitments in good faith. To their credit, most people who enter into contractual arrange ments, take out mortgages or avail of services intend to repay the debt in due course. Unfortunately, in the current economic climate many people are unable to meet those commitments. In this regard, the use of heavy handed tactics and intimidation is wrong. As I stated, many people find themselves in a situation not of their own making and are at their wits end to make ends meet. Often, at the end of the week or month they do not have the financial resources to meet the commitments which they set out from day one to meet.
It would be remiss of me not to mention that there are people who neglect their responsibility to meet commitments despite their having the financial resources to do so. We should not forget that there are people who choose to walk away from their commitments. Businesses that provide services and goods are entitled to have debts repaid to them as they, in turn, must pay debts. It is important people respect this and accept the obligation on them to meet their personal commitments.
Much of the public concern in regard to the operation of debt collection relates to mortgage debt. There are arrangements in place to deal with this issue. The recapitalisation of the banks, an issue about which we have heard so much and on which we have spoken at length, includes a code of conduct for mortgage arrears, which has been issued by the Financial Regulator and came into force on 27 February 2009. The new code applies to the recovery of debt in respect of mortgage lending activities to consumers in respect of their principal private residence in the State. It is mandatory for all mortgage lenders registered with the Financial Regulator, including so-called sub-prime lenders. Under the code, where a borrower is in difficulty, the lender shall make every reasonable effort to agree an alternative repayment schedule and, consideration should be given on a case-by-case basis to alternatives such as deferral of payments, extension of the term of the mortgage, change of mortgage or capitalising arrears and interest. Also, lenders may not commence legal action for repossession until after six months from the time arrears first arise. I welcome the code which I hope will provide people with an opportunity to repay their debts in an easy manner.
As mentioned by other speakers there are laws on the Statute Book dealing with this issue. The Non-Fatal Offences Against the Person Act 1997 deals with assault, intimidation and demanding money with menace. This legislation is in place for the benefit of those who need it. I reiterate that any person who feels threatened or harassed by another person or group of persons in the context of debt recovery should contact the Garda Síochána. It is unlawful for any creditor to seek to recover moneys owed in such a fashion. There are well defined procedures, judicial and non-judicial, for the recovery of debt. I believe there exists already ample law in respect of this issue. However, such matters must be brought to the attention of the Garda Síochána and should include evidence in support of the claim.
While I welcome the opportunity to speak on this issue, provided by Deputy Flanagan’s introduction of this Bill, I do not believe the legislation is practical or that it would serve any great purpose. I encourage people to use the laws already in place to deal with this issue.
Deputy Charlie O’Connor Deputy Charlie O’Connor
Deputy Charlie O’Connor: I welcome the opportunity to make a brief contribution to the Central Bank and Financial Services Authority of Ireland (Protection of Debtors) Bill 2009. Like my colleagues, I compliment Deputy Charles Flanagan on introducing this Bill. I regret Deputy Flanagan is not in the House as I was going to remind him of our conversation a few weeks ago, in the midst of the economic challenges, in which it was stated that what we need is a happy week.
I thank my colleagues, particularly Deputy O’Hanlon who has allowed me speak before him, for facilitating me. I am not usually parochial, but there is a group from an Cosán in Tallaght  in the Visitors Gallery. I am anxious to spend some time with them as they go on the tour. I will refer to Tallaght later.
I agree with what other colleagues have said on the subject matter of the Bill. We should recognise that we are in different times. I am old enough to remember a Dublin of far off times when there was much talk about difficulties associated with money lending and debt collecting. As Deputy Cregan and others have said, we still need to be very careful, given the times we are in, to recognise the difficulties people are facing. It is not just in Dublin and certainly not just in Dublin South West. It can be all over the country as other colleagues can confirm. From recent media coverage we know of criminal involvement in debt collection. The Government must keep a close eye on that situation.
The contributions so far have covered personal debt and the difficulties it causes for people. I recently came across a case in my constituency of a company struggling to retain jobs and maintain its business. It found it was owed large amounts of money by other companies, including a hotel which became insolvent. It is important to understand the challenges associated with debt collection. There are many different sides to that. I am glad to see the Minister of State, Deputy Curran, covering for the Minister for Justice, Equality and Law Reform. The Minister of State will know that I want to congratulate him on his efforts, particularly his work on the drugs programme. I will continue to maintain contact with him in that regard.
The Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, has had a very busy day. He has been dealing with the Criminal Justice (Miscellaneous Provisions) Bill. Like me he will have noted today’s shocking report on child abuse in the Dublin diocese. Like other colleagues I am upset and shocked by the report. I know the Minister will remain focused. As far as the business before the House tonight is concerned, the Minister will understand that from all sides of the House and certainly from the Fianna Fáil benches we want to tell him there are challenges to be faced. There is a need for legislation and I hope the Minister will introduce it. I also hope he will pay particular attention to co-operation with the Minister for Social and Family Affairs, Deputy Hanafin, in respect of MABS. In his speech the Minister of State placed particular emphasis on the need to support that money advice service. The Money Advice and Budgeting Service has offices throughout the country, including in Tallaght. A few weeks ago, I took the opportunity to bring the Minister, Deputy Hanafin, to see the good work being carried out there.
With the economy being challenged, very difficult times ahead and people losing their jobs there is a so-called new poor. People will say the poor were always with us but there now a new poor. As I go about my business throughout my constituency in Dublin South West, on the doorsteps in Tallaght and elsewhere people are telling me that for the first time they have to deal with these difficulties. For the first time they are out of work. For the first time they are facing the difficulties that fall under the remit of the Bill.
I look forward to supporting the Government’s approach on the Bill. However, the Minister should take account of the concerns being expressed on all sides. Deputy Charles Flanagan has initiated a very important debate and I hope we would all continue to support that. I look forward to doing that. I hope to be back in the House at 8.30 p.m. to vote. Meanwhile I will spend some time with my Tallaght friends and also my little granddaughter who is watching.
Deputy Niall Blaney Deputy Niall Blaney
Deputy Niall Blaney: I add my voice to the debate here this evening on the Private Members’ Bill proposed by Deputy Charles Flanagan to address the issue of debt collection and the regulation of debt collectors. It is strange the Deputy is not in the Chamber to hear the views expressed on the Bill. If a Minister introduced a Bill, a number of Deputies on the other side would be very quick to highlight it he or she were not present to listen to the views expressed.
 All of us in this House are well aware of the increasing financial strain that some people are enduring. There is undoubtedly unanimous understanding for those that find themselves in that situation. The current economic turbulence throughout the world has made it difficult for some businesses to survive and for some ordinary individuals to keep their heads above water financially. This has been aggravated by the availability of credit in recent years. Many have been living beyond their means and unfortunately, some are now experiencing an inability to meet loan repayments. Any support that can be provided to such people is very welcome.
I welcome the arrival of Deputy Charles Flanagan now. I commend the huge strides that have been made in assisting people in such situations by the Money Advice and Budgeting Service, which provides ongoing assistance to people who find themselves in financial difficulty and come forward seeking advice and help. Its contribution is invaluable. However, given that its work is limited to those who come forward to seek help, I would urge anybody in financial difficulty to come forward to be assisted by MABS. It is foolish for any individual or business to ignore financial trouble as help is available.
I welcome any proposal in this House on the matter and I commend Deputy Flanagan on his contribution. Unfortunately, the proposed Bill is flawed to say the least. The intended purpose of the Bill is to regulate the issuing of licenses to conduct debt collection activities. This in effect means that those who wish to administer the collection of debt would need to register with the Financial Regulator and be vetted by the Garda Síochána in order to obtain a licence to collect debt. They would also need to obtain a tax clearance certificate from the Revenue Commissioners. The regulator would need the power to refuse, revoke or suspend licenses at any time, and would be obliged to investigate complaints made by any debtor against a licensee.
This Bill falls down in many respects. As the Financial Regulator’s remit is confined to financial services, it is not its duty to regulate debt collection. Adding this type of responsibility to the remit of the Financial Regulator would generate all types of difficulty, not least a serious impact on its expertise and resources. There would of course be serious financial implications in this type of activity for the Financial Regulator and the Garda Síochána. Given the current economic circumstances, this would not be good news.
On deeper analysis of the proposed Bill, it is difficult to ascertain if a person or company operating on their own account would be included in this proposal. That is ludicrous. Would every individual and business that operates a credit system need to be licensed as debt collectors? It is obvious that inadequate thought and planning have gone into the Bill as these are very serious flaws.
Arrangements on debt collection already exist. The recapitalisation programme announced earlier this year includes a new code of conduct for mortgage arrears which has already come into force. This new code ensures that financial lenders make every possible effort to facilitate those who fall into arrears with their mortgages. It is not in the best interest of any of the parties concerned to use a heavy-handed approach and this new code ensures this does not happen. The Minister, Deputy Dermot Ahern, has indicated to the House that he intends to table a Report Stage amendment to the Land and Conveyancing Law Reform Bill 2006 to ensure that all repossession or sale proceedings on housing loan mortgages be taken in the Circuit Court. This is to counteract a trend that has recently emerged whereby such proceedings are taken to the High Court, which causes undue financial and personal burden for those involved and encourages them to enter a defence.
My advice to those who find themselves in uncontrollable debt is to seek the help that exists. Businesses are finding it difficult to survive at this juncture and imposing legalities upon them regarding obtaining payment for goods and services is certainly not the solution. There are  various options available to those who find themselves in a position of having to call in debt and there is help for those who find themselves in debt. The Bill proposes bureaucracy in what is an already difficult environment. It does not provide any solutions to the issue of debt collection.
Deputy Seán Fleming Deputy Seán Fleming
Deputy Seán Fleming: I welcome the opportunity to make a contribution to tonight’s debate on the legislation proposed by my constituency colleague, Deputy Charles Flanagan, the Central Bank and Financial Services Authority of Ireland (Protection of Debtors) Bill 2009. It is a very timely and important Bill covering an issue very much in people’s minds and it affects people’s daily lives.
While a thorough debate is needed on these issues, the Bill before us is not the way to proceed. It is well intentioned but would be difficult to implement in practice.
The Bill proposes a licensing arrangement for the recovery of consumer and commercial debt and would provide for the establishment of a debt collection regulator. This is an attempt to establish yet another State body or quango. I dare say if this side of the House proposed a debt collection regulator, several Members on the Opposition’s front bench would be jumping up and down both in this Chamber and on television before the night was out to accuse us of establishing another quango. That sort of inconsistency is displayed by the Deputies opposite every second week when they propose further quangos despite repeated calls for their abolition.
Deputy Charles Flanagan Deputy Charles Flanagan
Deputy Charles Flanagan: This is not another quango.
An Leas-Cheann Comhairle An Leas-Cheann Comhairle
An Leas-Cheann Comhairle: Allow the Deputy to continue.
Deputy Seán Fleming Deputy Seán Fleming
Deputy Seán Fleming: It would be a separate operation within the auspices of the Financial Regulator.
My main difficulty with the Bill is its failure to define “debt collector”. If it was confined to specific areas we could deal with this failure but, as has been mentioned previously, certain people with criminal connections are collecting debts. In recent weeks I have heard a first-hand account from a person visited regarding a debt by a notorious figure with gangland connections who has been given a name associated with a species of reptile. After being told a complicated story about property and being owed money by somebody else, the aforementioned gentleman offered to work for the debtor in collecting the next debt. I am aware of another person who engaged that individual and found him suitable for collecting straightforward debts of a couple of thousand euro but unable to deal with more complicated matters.
I recently heard reports on the radio regarding customers who had paid deposits of several thousand euro to a large furniture shop in Dublin which subsequently went into liquidation or ceased trading. They knew this was happening and in theory they were owed money or goods. They charged into the shop to seize the goods and loaded them into their cars and vans because they believed they would not be paid the debts they were owed. We have all heard about cases in which subcontractors on building sites have not been paid and are owed money. Some have had to enter the sites to seize or recover the goods they had provided. That is a difficult area. I am concerned that people who are abusing their positions are unlikely to come into the transparent area of registration. The Bill could, however, create difficulties for corner shops which are owed money by local customers, not to mention Bord Gáis and other organisations.
This issue of banks and seizures of houses has been raised. Thankfully that has not occurred on an extensive basis despite widespread coverage of the issue. I am concerned about the actions of local authorities in this regard because I have found they are sometimes overly  aggressive in threatening people who have fallen behind in repaying loans because of job losses. The Government’s request to financial institutions for a moratorium of 12 months where people have lost their jobs does not appear to have been heeded by local authorities. While I welcome this debate, much more work is needed before we can pass this Bill into law.
Deputy Rory O’Hanlon Deputy Rory O’Hanlon
Deputy Rory O’Hanlon: I join my colleagues on this side of the House in commending Deputy Charles Flanagan on the time and effort he put into preparing this Bill particularly given the fact that one does not have all the resources one would wish when in Opposition.
Many businesses are facing problems in the context of the current world recession and individuals are finding it increasingly difficult to make mortgage repayments.
The Bill would require debt collectors to register with a new branch of the Financial Regulator. This represents a totally new departure in the regulation of debt collection and would result in increases to the regulator’s workload, staff complement and budget. The new regulator would be obliged to investigate all complaints made to it. The Bill would also add to the workload of the Garda.
It has already been pointed that the Bill does not define “debtor” with the result that anybody intending to collect a debt would have to register. This would affect Eircom, Bord Gáis, professional people, small shops and anyone else who delivers goods and services because debt collection is normal to all businesses. The Bill could be costly even while failing to achieve its objectives.
Mortgages have become a major issue for many people. The recapitalisation programme announced in February includes a code which insists that lenders make every effort to find a reasonable solution to this problem. AIB and the Bank of Ireland have agreed that they will not attempt to seize main residences for a period of 12 months and sub-prime lenders will not do so for a period of six months.
I pay tribute to the Money Advice and Budgeting Service, which does not receive the recognition it deserves. For many years it has been a tremendous source of support to people who find themselves unable to meet their commitments. My county is particularly fortunate in having a very active MABS office with professional and dedicated staff who give tremendous support to those who find themselves in financial difficulties. I am aware that MABS advertises widely but we should make greater efforts to ensure its free, confidential and independent services are more widely known. It is important that people in financial difficulty seek support sooner rather than later. MABS works closely with credit institutions and utility companies. If more resources become available I would like to see an increase in MABS staff numbers rather then the establishment of a new body because the former’s workload has increased considerably.
I again commend Deputy Charles Flanagan on his work in preparing this Bill. However, while it is a worthy subject for debate it is not suitable as it currently stands.
Deputy Dan Neville Deputy Dan Neville
Deputy Dan Neville: I wish to share time with Deputies Michael Ring, Jim O’Keeffe, John O’Mahony and Paul Connaughton.
I welcome the opportunity to contribute to the debate and I congratulate Deputy Charles Flanagan on introducing this important legislation. The purpose of the Bill is to regulate debt collectors in order that there is control over them and to ensure that they are registered with the Financial Regulator and vetted by the Garda before they can operate as a debt collection agent in Ireland. The State has no system of debt regulation unlike most EU countries and, as a result, anyone can set up a debt collection agency. There are no rules on how they should  operate. Debts can also be sold on without the creditor’s knowledge. With more people owing more money, debt collection will become a more profitable business for some.
Individuals should honour their debt obligations. However, debtors and members of the public should be protected in law from debt collection methods that overstep the bounds of acceptable pressure. Debt collection can involve the exertion of pressure on the debtor. The media have reported on examples of the tactics employed by debt collectors to retrieve funds owing. There is also evidence that persons with a criminal background are operating in this industry and, as a result, some debtors feel intimidated, harassed and threatened.
I refer to those with mental illness who are particularly affected by debt and who must be handled in a compassionate fashion. There is a greater likelihood they will accrue debt than normal people. A recent study in the UK — the money would not provided to conduct a similar study in Ireland — found that in times of recession a significant issue is the worsening of conditions for those with mental health problems. The report showed that 50% of respondents went without food or heating at certain times of the week. The research found that people with mental health problems are three times more likely to be in debt, as they live on low incomes and are unable to work due to difficulties obtaining a job because of the stigma surrounding their ill-health. A total of 71% of those with mental health problems debt ran out of money every week or most weeks, 87% relied on credit to pay for food and everyday costs, 56% had gone without food due to the debt, 21% had gone without heating and 92% reported not being able to socialise because of the pressure of the debt.
It is important that debt collection agency staff receive mental health awareness training. If one does not have an organised debt collection controller, as proposed by Deputy Flanagan, it is difficult to ensure that this will happen. Debt collectors and banks should adopt a system whereby customers can choose to have their accounts monitored for erratic spending to better protect their finances. Irish personal debt stands at a staggering €172 billion and it is a significant burden on our mental health. Money worries do not only keep people awake at night as they also cause high levels of stress, depression and, in some cases, lead to self-harm and suicide. At a time people are anxious about their finances, debt depression is a real and growing concern. People living with mental health problems are particularly vulnerable to being trapped in a cycle of debt and poverty with many unable to work due to ill-health. People are becoming dependent on credit to pay for everyday essentials. Those on lower incomes are more likely to obtain credit from lenders who charge astronomical interest rates. It is a worrying trend, as people are left facing a debit mountain for which they have no means to repay.
If we are to tackle this massive inequality and help people who are struggling with mental health problems and debt, we need action from the Government, the HSE, banks, debt collection agencies and other creditors. Changes in practice such as waiving fees when a customer has been unwell and introducing mental health awareness training for bank staff would make all the difference. Creditors have a duty to help by not hounding their customers, especially when they are coping with serious health problems. People with bipolar disorder, which can cause them to spend extravagantly during a manic phase, or schizophrenia are four times more likely to be in debt than the rest of society.
According to the survey I mentioned, fewer than one in three with problem debt informed the organisation to which they owed money of their mental health problems because they did not think they would be understood or believed. A total of 83% of those who informed their creditors continued to be harassed about their debt payments. The Government must give leadership in this area to ensure resources are available to the psychiatric services to deal with this fall out from the current economic crisis.
 The debt collection industry in Ireland comprises a small but wide spectrum of operators ranging from solicitors to known criminals. There are no official statistics for the number of debt collection agencies in operation but, according to RTE, there are approximately 50 such agencies. An article in The Sunday Tribune in April revealed that:
gardaí in the midlands gave security advice to a businessman after he complained that the criminal called to his home seeking money in a manner that made the man “ill at ease”.
The criminal is regarded as a notorious gangland figure; he has dozens of convictions. The businessman owed a creditor a significant amount of money but was unable to pay it and received a visit from the notorious criminal.
The debt collection business is thriving but he is by no means the only convicted criminal branching out into this area. There is evidence that, as the economic downturn continues, several criminal gangs have become involved in the industry. As many small companies fold, there is an emerging trend of frustrated creditors hiring criminals when they are unable to collect debts.
Often the creditors claim they cannot afford to wait for the outcome of court proceedings as their own businesses are in jeopardy. This is most common in the construction and property sectors, which have been badly hit by the recession.
Some criminals acting as debt collectors have threatened physical violence and damage to property. Eastern European gangs and Russian mafia are also suspected of getting involved in the business, particularly in Dublin.
According to Deputy Charles Flanagan, “There are disturbing reports of threats, intimidation, destruction of property and even physical assaults on people owing substantial debts”. The main function of the debt collection regulator is to issue licences to suitable applicants once they have supplied all relevant documentation, including certificate of clearance from An Garda Síochána and a tax clearance certificate by the Revenue Commissioners. A licence will issue on a two yearly basis. It is the right of the regulator to refuse, revoke or suspend a licence at any time.
Deputy Michael Ring Deputy Michael Ring
Deputy Michael Ring: I compliment Deputy Flanagan on introducing the Bill, which is badly needed if we believe media reports on how individuals and businesses have been targeted by people collecting debt on behalf of banks and other institutions. The Bill is timely and the Government parties should not vote against it. I hope they will accept it and bring forward the necessary amendments on Committee Stage. The Bill is necessary and well thought out. People are looking for this kind of legislation. The State must always regulate financial matters concerning debt collectors and debtors. The law must be in place for the person to whom the money is owed, but also for the person who is in difficulty.
Deputy Neville is correct in saying that many people are currently in a very serious economic situation. I heard from someone recently who is under a lot of pressure because the sheriff has set a date for his home to be vacated. However, while the sheriff, the debt collector and the bank get paid, there is no help at all for people who find themselves in such difficult situations. They must get rid of their belongings and seek alternative accommodation if their homes are seized.
The time has come for this kind of legislation. In a civilised country we cannot have the Mafia, criminals and gangsters collecting money on behalf of individuals by threatening and upsetting people. In some cases, these people may break up someone’s home and threaten to injure them the next time they come.
 Deputy Neville is also correct in saying that sane people who have never been mentally ill can be very badly affected when they find themselves in this kind of difficulty. I have seen it happen. It affects them mentally as well as affecting their families and homes, but there is no back-up support for them.
I compliment Deputy Charles Flanagan on introducing this Bill which is very necessary. The number of people in economic difficulties will grow because of the economic crisis, but we cannot have criminals collecting money by threatening people.
I want to tell the banking institutions, local authorities and all State agencies that these are difficult times for many people. If people find themselves in financial difficulties, rather than posting them nasty letters and threatening to send the sheriff to repossess their homes, they should sit down to work out how such matters can be resolved. Currently, the banks are depending on taxpayers and the State to bail them out, yet at the same time the banks are putting pressure on small businesses and family homes. Families are under severe pressure in this country at present. There is no doubt, however, that the banks created many of the problems by giving money to those who could not repay it. The banks did not do their work properly, yet they are now pressurising people to pay back money they should never have been given in the first place. None the less, when the banks and other financial institutions got into difficulty we did not send in the Russian Mafia to deal with them, although perhaps we should have. The way they behaved caused problems in this economy and law-abiding, tax-paying citizens and the State have had to bail them out. The bankers went away with big bonuses, but poor people are being pressurised by gangsters trying to take money off them that they do not have.
I compliment Deputy Flanagan and hope the Government will accept the Bill. I hope the Minister will also make the necessary amendments to it. We cannot have criminals and gangsters administering the law. We must have law and order for everybody — the poor and weak as well as the rich.
Deputy Jim O’Keeffe Deputy Jim O’Keeffe
Deputy Jim O’Keeffe: The first question to be addressed is whether we have a debt problem in this country. I am sure no one will deny that at this stage. The figures speak for themselves. The ratio of personal debt to disposable income has more than trebled over the past 12 years. The figure was 48% of disposable net income in 1995 and is more than 170% now. That is the issue but is the Government in denial about that problem?
I will cite some other figures to bring the message home. We remember the parables from the Gospels long ago. I am going to tell the parable of the people who are sent to jail because they cannot pay their debts. I tabled a question some time ago to the Minister on the number of committal orders over the years, either for non-payment of debt or fines. The Minister was only able to give me the figures from recent days, but they were startling. In 2007, 1,335 people were committed to prison for non-payment of fines. One may say that is an outrageous figure, although I will not go into the details. In 2008, however, the figure increased by 50% to 2,154. In 2007, the number of people committed to prison for non-payment of debt and committal orders was 201, and the figure rose to 276 last year.
These figures highlight the fact that there is a serious problem. I have always contended that people do not go to prison if they can afford to avoid it. Most of the people in prison should not be there, and certainly not just because they are poor.
Deputy Flanagan’s Bill refers to modern collection methods that have been developed in recent times. We have seen vultures and vipers who threaten vulnerable people, but are we going to do anything about them? Will we really continue to allow vulnerable people to be  exposed to these strong-arm tactics? It is easy for the Minister of State to say, as he did in a recent reply, that they can go to the Garda but he is three steps removed from reality. Does he not know that they are unable to go to the Garda because they are fearful and worried the strong-arm tactics will become worse and that they will be knee-capped? Many of those involved in the strong-arm tactics have past experience of knee-capping methods.
The real question is what can we do about it. Deputy Flanagan has made an honest effort but I do not believe the Government can be proud of its reaction to that effort. I am not saying Deputy Flanagan’s Bill is 100% right. Any Bill produced with the limited resources available to the Opposition cannot be 100% correct. We do not have the facilities of the Office of the Parliamentary Counsel or the Attorney General’s office. However, it is a decent Bill that is worthy of fair consideration, yet it has not received that from the Government.
The Minister of State, Deputy Barry Andrews, damned it with faint praise. He said it was worthy of debate. A serious reaction would have been to agree Second Stage, put it into Committee and deal with the kind of issues he dealt with in his speech, which I thought were mealy-mouthed. His approach was nit-picking. He said there was nothing in the criteria for specific mention of previous convictions, but the bailiff is the problem. That is utterly ridiculous. He talked about the cost but the measure would be self-financing because if someone was seeking a licence, the person would have to pay for it. One could fix the licence fee to cover administrative costs. The Minister of State also referred to significant financial and staffing resources, but that is a smokescreen for inaction.
The view of the Department of Finance is so ridiculous as to hardly be worthy of mention, but I will mention it anyway. We were told that the Minister is of the view “that the collection of debts as an activity is not necessarily comprehended in respect of the provision of financial services”. What in the name of God does that mean? That is no way to address a serious Bill such as this.
There is a serious flaw in the system which must be addressed, but the Government is in denial about the problem. It has not given this worthy effort a fair hearing and it deserves to be condemned for that. Its attitude to the banking system was that everything was fine, the fundamentals were sound and the regulatory system was fine. They were proved to be wrong and they will be proved wrong again on this matter.
Deputy John O’Mahony Deputy John O’Mahony
Deputy John O’Mahony: I am glad to contribute to this debate. Like other speakers, I compliment Deputy Flanagan on bringing this Bill before the House. I have listened to a plethora of Government Deputies, although the Minister of State, Deputy John Curran has not yet spoken. Perhaps I am a little naive as I have been a Member of the House for only a couple of years but for the past six months I have listened to Members on the Government benches asking us whether we would like to make suggestions on the budget and on what should be done, yet many suggestions from Fine Gael and other Opposition parties have been dismissed.
The other question asked from the Government benches is what would we do. I see the Bill as a very honest effort on behalf of Deputy Charles Flanagan; he is reacting to a situation that we all see in our offices and our constituencies where people are in debt and are being forced to pay back what they owe by an increasing criminal element, even though they have lost their jobs or their businesses have gone to the wall. This has been well catalogued.
It is hard to believe that in 2009 this is the reaction we are getting from the Government. Perhaps in some ways it reflects what it has done and how it has run the country. In 2009, it is unbelievable to think there are no structures in place to regulate debt collectors at a time when personal debt of disposal income has more than trebled in the past number of years. It is also  unbelievable that the Government has never introduced some form of regulation or has no plans to do so at a time when we hear horror stories of criminal elements taking the law into their own hands and intimidating, threatening, harassing and beating up people who are in arrears with their payments.
Everyone has obligations. Nobody is suggesting that debts do not have to be repaid. However, that can be done in a way in which everyone has their rights upheld and no one is allowed to take the law into their own hands. The timing of the Bill could not be more appropriate, with thousands of families driven to desperate methods to obtain loans from moneylenders who charge exorbitant rates of interest and then come down heavy if the loans are not repaid. The problem has multiplied in the past 12 to 18 months with the downturn in the economy.
Businesses are going to the wall and people are losing their jobs and in many respects everyone is a victim. We have all heard stories of properties being vandalised and destroyed, people being terrorised in the middle of the night and acid being thrown on cars parked outside houses. In a society where respect for human life is decreasing all the time somebody must prevent the rules of the gangland taking over. It is well documented that the criminal element is infiltrating this business. Regulation protects the law-abiding people working in this industry. Many people in the debt collection business are law abiding, they are above board and they provide a reputable service that is in demand in modern society. They have nothing to worry about from this Bill because they tick all the right boxes. The Bill gets the balance right between exerting pressure on people to repay their debts and not resorting to heavy-handed and illegal methods, which in certain instances can cause unbelievable stress on individuals and families where suicide is contemplated. We have unfortunately seen this in recent high-profile cases.
I want to refer to an area that is technically outside the remit of the Bill, which is that debtors are committed to prison for non-payment of debts or fines. Deputy Jim O’Keeffe also spoke about this matter and I do not need to repeat the many figures he provided. These people are kept in prison for an average of 20 days but on release the debt remains. All that is achieved is the cost to the Stage, averaged at approximately €2,000 per week, without solving the problem of the unpaid debts and adding to the scandal of our already overcrowded prisons, a matter brought into sharp focus yesterday with the news that the new prison complex at Thornton Hall has been put on hold despite the millions of euro of taxpayers money already spent on the project.
What is needed is an overall and comprehensive package of measures to help all sides in this very important issue, namely, those in debt, those owed the money and those charged with collecting the debt. The Bill is an important plank in this package and I commend it to the House.
Deputy John Curran Deputy John Curran
Deputy John Curran: I will respond on behalf of the Government to Deputy Charles Flanagan’s proposed Private Members’ Bill. I will begin by responding to one point raised by Deputy O’Mahony, where he made reference to those in prison for the non-payment of fines. This issue is being dealt with specifically in the Fines Bill. It is an appropriate point to make and Deputy O’Mahony was correct to do so but I wish to point out that it is being dealt with as it would be remiss not to do so.
Deputy Charles Flanagan’s proposal has been commended by the Government for the humane concerns that clearly lie behind it. I commend the Deputy for the efforts involved in bringing forward the proposal and the objectives are understandable. However, it was pointed out that the legislation as drafted is flawed. Last night, the Minister of State, Deputy Barry  Andrews, pointed out some of these flaws. There is no definition of debt collector; there are no criteria specified in regard to deciding who might be a fit and proper person and there is no provision in regard to any business collecting its own debts to its own account.
If Deputy Charles Flanagan’s proposal was enacted, this last consideration would mean that every business person, company and partnership would first have to be registered as a licensed debt collector to continue its normal business. This would be a near impossible bureaucratic task but it is what is proposed in the Bill. This is a particularly serious flaw in the approach set out by Deputy Flanagan. It would seem to require every person and company involved in a business activity, be it the sale of goods or services, to have to seek licensing as a debt collector before it could seek to recover moneys owing to it in the normal course of business. This would apply from the biggest company to the smallest shop or self-employed tradesperson. Is this seriously what the Deputy has in mind because it would appear to be the main consequence of this proposal? It would appear to be a somewhat bizarre, cumbersome and bureaucratic approach.
Related to this point is the fact that the draft Bill does not define a debt collector. This deficiency was also commented on by Deputy Rabbitte last night. Effectively, it makes the intended scope of the Bill unlimited, which clearly would not be desirable. Deputy Flanagan’s proposal would require significant financial and staffing resources for the Financial Regulator and for the Garda Síochána in terms of potential vetting of applicants. Last night, my colleague stated that in the context of scarce resources available to the Government at this time this would not represent the best use of such resources.
During this debate Deputy Charles Flanagan made some very serious accusations concerning criminal activity in debt collection and the private security industry. The Government does not protect criminals, rather it pursues them relentlessly within the law. The Government attaches the highest priority to tackling organised crime and bringing those involved in such activities to justice. In this regard, among the main priorities set out by the Minister for Justice, Equality and Law Reform for the Garda Síochána in 2009 are to target gun crime, organised crime and drug related crime through a range of measures including the use of the Garda specialist units and targeted operations such as Operation Anvil.
Deputy Flanagan made more wild accusations concerning the activities of the Private Security Authority and I welcome the opportunity to set out some details of the work of that authority. The authority has licensed 850 contractors and more than 22,600 individuals to operate in the security industry in Ireland. Prior to any licence being issued by the authority, the applicant is vetted by the Garda Síochána. The authority is in contact with the central vetting unit on a daily basis and an excellent working relationship exists between both bodies. The vetting of applicants is an integral part of the licensing system provided for in the Private Security Services Act 2004.
In the case of those applicants who have resided outside of the State for a period of six months or more, a criminal record certificate from the foreign jurisdiction is required. Once again, it is a condition of licensing that this requirement is fulfilled prior to a licence being issued. The authority does not and never has issued licences based solely on a foreign criminal record certificate. The authority also has in place robust procedures for dealing with domestic and foreign criminal record checks. These procedures include the assessment of the information received against the authority’s guidelines on criminality, with applications being refused where convictions are deemed relevant in accordance with the guidelines. The criminal record checking and criminality guidelines are continually monitored and validated to ensure these systems operate as effectively as possible. In addition to the criminal record checks, all applicants for a licence must provide evidence of having attained the relevant standard or qualification. In the  case of contractors, they are required to comply with a National Standards Authority of Ireland approved standard. Applicants seeking an individual licence are required to obtain a FETAC recognised qualification.
The licensing regime is also supported by a resolute enforcement strategy undertaken by the authority’s dedicated enforcement team. To date, the authority has brought successful criminal prosecutions against 21 unlicensed operators, while over 600 consumers of security services have terminated contracts with unlicensed providers.
The establishment of the authority has brought about a fundamental transformation of the security industry in the State. We have observed the removal of unscrupulous security providers and the restoration of public confidence in the industry as a result of the authority’s endeavours. The introduction of a standards and training based licensing system has had many positive benefits for the industry, the wider business community and the public. The licensing of the security industry is a significant body of work which is delivering a professional security service. I am assured that the authority’s licensing process is robust and the public can be assured that only those who meet the authority’s criminality guidelines are licensed. The improvements in the industry brought about by the establishment of the authority should be supported and commended.
With this proposal which is poorly drafted Fine Gael is seeking to create a regulatory structure which, if one interprets the draft text of the Bill, would require the licensing of every business in the country as a debt collector. Each person or company would have to be vetted by the Garda Síochána and satisfy a quite vague fit and proper test. Deputy Flanagan has not enlightened us on how this objective can be achieved, given its vast scope. That is what the text of the Bill involves. This is, unfortunately, an underdeveloped proposal. Deputy Morgan was of a similar view last night. He suggested focusing on other legislative proposals which deserve greater priority at this time. He rather sensibly suggested this was an area which the select committee on finance might consider to examine the options that might be available. These options might be effective and low cost, and not require legislative intervention.
Debt collection agencies seek to recover debts arising from a wide range of activities, including borrowings, utilities and so forth. Lenders that are regulated by the Financial Regulator sometimes outsource debt collection. In such cases, the Financial Regulator’s consumer protection code requires that the regulated firm must ensure persons contracted to carry out an outsourced activity which would include debt collection comply with the requirements of the code.
There is also some confusion concerning the offences in the Bill proposed by Deputy Flanagan. The proposal seems to take no account of existing provisions of the criminal law in the Non-Fatal Offences Against the Person Act 1997. There is no evidence that this legislation which applies to demanding money with menaces or false representation is inadequate for its intended purpose. No reason has been advanced as to why we should introduce special legislation specific to this area of activity. I heard Deputy Flanagan’s speech last night. Although I support the principle of what he is trying to do, the motivation and catalyst for his proposal are a particular operation on which he elaborated and a particular debt collector. The legislation to which I have referred should be used if that person is collecting money with menaces. That is the appropriate approach. It is unfair not to indicate to the House that legislation in that regard is in place and should be used.
To conclude, I am not sure how effectively we can regulate what might be alleged criminal behaviour with regard to debt collection. I appreciate the sentiments behind the Deputy’s proposal but do not believe it is the correct one.
Deputy Denis Naughten Deputy Denis Naughten
 Deputy Denis Naughten: I wish to share time with Deputy Flanagan.
An Ceann Comhairle An Ceann Comhairle
An Ceann Comhairle: That is agreed.
Deputy Denis Naughten Deputy Denis Naughten
Deputy Denis Naughten: I welcome the opportunity to speak on the Bill. All Members have received reports of people having been intimidated by well known criminals. There are also reports of threatening behaviour, property being vandalised and even assaults. It is not just the individuals involved who bear the brunt of this force and thuggery. Their neighbours also live in fear lest the wrong address is given and the perpetrators end up vandalising an adjoining property or assaulting a neighbour. It is a very worrying aspect of the new debt collection industry. There is an increasing number of reports that criminals, as well as the eastern European mafia, are getting involved in it.
There is a need for urgent action to protect vulnerable debtors from threatening behaviour and worse by some debt collectors, first, by vetting prospective debt collectors, licensing them and their operations and providing for a complaint mechanism for debtors and, second, by identifying those entering the country who are planning to sell their skills in threatening behaviour, vandalism and assault. A Europol report last year described Ireland as a highly attractive destination country for criminal gangs involved in crime and the smuggling of immigrants. It highlighted the urgent need for proper border control systems and co-ordination between the Garda Síochána and its colleague forces throughout the European Union. There must also be co-ordination in this country between the various Departments involved.
While the right of EU citizens to travel within the Union must be protected, we must also stamp out cross-border crime. This must involve stronger co-operation and the sharing of information between EU police forces through Europol and within the country among the agencies of the State. There is no central EU database for criminal convictions. We believe all member states should maintain a national DNA database and share the information with other member states. However, the Government has failed to establish such a database. Once operational, it could prove a key factor in improving conviction rates for serious crime. The sharing of such information must become commonplace to improve border controls. A criminal database must be accessible across jurisdictions to ensure all information is available for the policing of borders.
It is also important to have an integrated border management system which includes both the Garda Síochána and the social welfare system. They must be given adequate resources to screen people coming into the country and record those who are leaving. There is an urgent need for greater co-operation between the various agencies of the State. Our ports, for example, are also seen as a soft touch with regard to immigration checks and Garda screening. There have been numerous reports of individuals coming to our ports because our immigration checks there are scant. People with serious convictions in other parts of Europe are using them as a way to enter the country. Many officials working in this area and in the area of the trafficking of human beings say our ports, including the port of Larne and, as a result, the border with Northern Ireland are seen as soft options for entering this jurisdiction or moving on to the United Kingdom. It is vital to have co-ordination between the agencies in this jurisdiction and across Europe.
The Department of Social and Family Affairs which is involved in meeting people when they arrive in the country must have a more proactive approach in conjunction with the Garda on the information collated for issuing PPS numbers. Under the current system, it is relatively easy for migrants who are sought in other countries on criminal charges to obtain a PPS number from the Department of Social and Family Affairs. The required technology and training must be put in place to ensure PPS numbers are denied to persons using false documentation or  those who are being sought for serious criminal offences in other countries. Surely there can be greater co-ordination, whereby if the Garda does not identify a person at our ports or airports or if a person comes across our unpoliced border with Northern Ireland, the social welfare system could be used as a safety net to identify these individuals and ensure they are brought to the attention of the Garda.
The social welfare system, even with the limited technology currently available to it, has identified people using false documentation to obtain a PPS number. Citizens of the State or persons from outside the State who use false documentation to obtain a PPS number are doing so to exploit some part of the system. It is not in our interests that such activity should continue. It is a weakness within the current system. The Bill proposed by Deputy Charles Flanagan would act as a safety net in regard to this particular industry through the licensing of people who are working or seek to work within the system.
It is important that we get our act together at European level regarding the co-ordination and sharing of information, but it is also imperative that we get our act together in this State. The Minister for Justice, Equality and Law Reform has spoken about the introduction of an Irish border information system. This proposal is long on promises and short on delivery. There is a major problem in regard to communication between the Garda and the criminal justice system, on the one hand, and the Minister on the other in identifying individuals who are citizens of the European Union and who potentially represent a threat to public policy or public security in this jurisdiction. There must be a formal mechanism of exchange between the Garda and the Department on the criminal activity of such individuals. The courts must be empowered to refer specific cases to the Department where the judge, in the process of sentencing, has identified an individual who should be brought to the attention of the Minister. Discretion must ultimately rest with the latter as to how such information should be acted upon. These matters must be dealt with on a case-by-case basis.
That type of information co-ordination and communication is not currently being provided. Different arms of the State are collecting information but not communicating that information to each other. As a result, there is no identification of individuals, whether citizens of this State, citizens of the European Union or otherwise, who should be brought to the attention of the Minister and potentially removed from the State. There is no formal system whereby the Garda or border control officials convey information on Irish citizens to the Department of Social and Family Affairs where such information should rightly be brought to its attention. That type of information sharing is not happening.
This legislation provides an additional safety net in identifying those persons who are slipping with ease through our current border check system. As a positive step forward, I am disappointed that the Government proposes to reject it. I commend the Bill to the House.
Deputy Charles Flanagan Deputy Charles Flanagan
Deputy Charles Flanagan: I thank Members on all sides of the House who spoke on this Bill. In particular, I acknowledge the support of the Labour Party. I regret that while all Government speakers acknowledged and commended the merit and principle of the Bill, none indicated a willingness to go so far as to allow it a Second Reading. This is a consequence of the Whip system that obtains in the House.
I have received a large volume of correspondence and telephone calls on this matter and have interviewed people at my constituency office in recent months. Since the publication of the legislation, I have been inundated with information from people throughout the State. One e-mail I received in recent days from an individual suffering from the activities of debt collectors is particularly relevant:
 I am writing to you nearing my wits end. I am involved in the construction industry and ran a successful business until six months ago. I provided substantial employment, paid all my bills and taxes and worked very hard to achieve my simple goals. I never made a fortune in development, far from it. The truth is I got into the business too late in that the money had been made a few years before. Not alone am I at risk of losing my home, my reputation and all I have worked for — and I mean worked, most of the time doing 18 to 20-hour days, seven days a week — but now I am faced with a different problem, a far greater one, that is, debt collectors. I would like to ask how these people can operate a legitimate business. They terrorise people with their calling to your door with hired thugs, calling to your place of work, calling to your family.
I recognise that I owe money. As you can understand, I cannot find work and a lot of money is owed to me. But I am going about it the right way by going though the courts. All I want to say is that the issue of criminals running debt collection businesses must be raised at the highest level before it is too late, not just for me but for others in my situation. I like to think of myself as a businessman, a hard working one at that, providing for myself and my family and providing revenue for this State. What have these criminal heavies ever done except the obvious? I am just a hard-working man trying to make a living and I need redress under the law.
There has been criticism of this legislation from Members on the other side of the House in their claim that it will install a new burden in terms of an additional regulatory mechanism or quango. That is not the case. What I have proposed is deliberately designed to be part of the existing State agency structure. There have been claims that this new regulatory framework will cost millions of euro, involve thousands of personnel and impinge on the work of the Garda Síochána. Nothing could be further from the truth. The proposed mechanism would be self-financing. Every person who successfully applies for a licence would be obliged to pay a licence fee, along the lines referred to by the Minister of State, Deputy John Curran, in reference to the Private Security Authority. I can only conclude that the only reason the Government proposes to deny the Bill a Second Reading and a subsequent line-by-line scrutiny in committee arises from narrow party political concerns. That is greatly regrettable.
Why are we out of step as far as a regulatory framework is concerned? There are European Union-wide regulations in operation in all other member states. The Bill has received the support of bodies engaged at the coalface with those who are suffering as a result of straitened financial circumstances. It has received the support of the free legal advice centres and the Combat Poverty Agency. The Irish Institute of Credit Management has said it would be satisfied to have its members regulated in order to distinguish legitimate collection agents from the “less salubrious” practices of others. Moneylenders, mortgage managers, credit investment and insurance intermediaries, bank finance houses and credit unions are all regulated, most of them by the Financial Regulator. There is every reason that those engaged in the debt collection business, who are acting on behalf of these institutions or have purchased debts from them, should be regulated. The failure to do so has given rise to the serious difficulties of which we are aware throughout the State.
I accept this legislation may not be perfect. I acknowledge that we on this side of the House do not have the advice of the Office of the Attorney General and a plethora of parliamentary draftsmen who can spend months — or years, in some cases — working through the legislative process. That is no reason to deny the Bill a Second Reading. If the Bill were to reach Committee Stage, we could draw on the wisdom not only of Members on this side of the House, but also on that of the Government and its advisers.
 If the Government proceeds to throw out this legislation, we will have a situation where there are no rules, no regulation, no standards, no licensing system and no control in this area. That is an invitation to criminal heavies to continue their business in debt collection and to put further pressure on hard-pressed individuals and families. This is a lost opportunity. I am certain the House will have no choice but to revisit this issue at a future date. It is regrettable that narrow party political interests on the part of Fianna Fáil have hindered this legislation. There is little point in mentioning the Green Party as it has had no involvement in this Bill, no more than it seems to have any involvement in the workings of this House on a daily basis.
This was a bad day’s work. The Bill presented the House with an opportunity to address this issue, which I have no doubt we will have to deal with in future. We cannot allow the situation which obtains to continue. We do not have a system of regulations or licensing and we cannot have a free-for-all. Evidence is emerging from across the country that people are being harassed and intimidated by shadowy heavies engaged in the debt collection business who are able to do so with impunity owing to a lack of regulation.
The Dáil divided: Tá, 54; Níl, 73.
Dáil Éireann 683 Central Bank and Financial Services Authority of Ireland (Protection of Debtors) Bill 2009: Second Stage (Resumed).