The proposed measures announced by the Central Bank today, if properly enforced, should provide much needed protection to the 340,000 licenced moneylender customers in Ireland, says the Society.
SVP was responding to today’s publication of the Review of the Consumer Protection Code for Licensed Moneylenders, which includes proposed measures that would enhance the framework of protections for customers. A public consultation on the contents of the revised code will remain open until the 27th of June.
SVP has continually expressed concern about the prevalence of high cost borrowing from licenced moneylenders among the people they assist, many of whom try to cope on a limited weekly income.
Kieran Stafford, SVP National President said “The people that we are helping are on such low incomes that bills, utilities, and rising rents, have forced people to access money from lenders when they just can’t make up the difference themselves. Pressure points like Back to School, Christmas, Confirmations and Communions also put significant strain on low income families and feel they have no choice but to turn to moneylenders. It is our experience that people tend to use moneylenders when they have limited access to other sources of credit and they may be worried about cutting themselves off by reporting abuses within the sector.”
“The proportionately large amounts of credit available, and interest rates of up to 187%, are therefore predatory and exploitative. We have continually highlighted the need to better protect vulnerable customers and are therefore pleased to see the proposed enhanced protection measures published today” he continued.
Dr. Tricia Keilthy, SVP Head of Social Justice added “SVP volunteers try to discourage people from using doorstep credit services and offer responsible alternatives, such as the ‘Personal Micro Credit Loan’ (PMC) offered by the Credit Union. Volunteers continue to signpost potential customers to the scheme, as well as encouraging local credit unions to take part. The availability of affordable credit is key but proper regulation and protection is also needed. The proposed measures, particularly the introduction of a debt to income ratio limit and greater restrictions on advertising and unsolicited contact, are therefore very welcome. It will be critical that compliance with these measures is properly enforced.”
“Ultimately, however, given that the moneylending industry has become embedded as part of the landscape of credit in Ireland, we are calling on Government to introduce an interest rate cap that reduces the total cost of credit moneylenders can legally charge”, she continued.
SVP will be submitting a more detailed response to the revised code in the coming weeks through the Central Bank consultative process.